# Under bid a job.



## irving (Jul 30, 2004)

I am about 90% complete with a job I have under bid. My costs were a little lower when I bid it, now that we are in the completion stage (plumbing supply lines, drywall) the costs are getting out of hand. I want to re negotiate the contract just enough to create a break even on the finals. In 12 years I have never done this. Well I am today. Looking for some advice other than "eating it" I could figure that one on my own. Any one have any experience with this?


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## Gordo (Feb 21, 2006)

Whats your contract say about materials increases?


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## fci (Dec 11, 2006)

How will you fare financially if you suck it up. I wonder if the you can put a price on a good reputation? That last thing you may want is word getting out that you raised your price during the job or near the end. As the previous replay stated look over your contract and if you oooopsed you just had a crash course in underestimating and contract wording. Good luck, I had to suck up a big one about seven years ago but I recovered and the customer never knew, many referrals came from that couple.:clap: :clap: :clap:


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## Danahy (Oct 17, 2006)

A "Good / Bad" approach would be finish up what you've done, collect what's coming, then send a follow up invoice for a resonable amount for recovery... then wait. If it comes, you've got it. If it doesn't, it could leave a bad taste in thier mouth...

If it were me, I'd say to the HO, " I anticipated a couple of surprises, but got hit with a few more than I expected... I'm a man of my word, and I'd just like to let you know that I'm going to complete this, and make sure your happy in the end. "

Two things might happen here: 

1. The HO, opens up the discussion with "where do you think you went wrong?"... (possibly more money available...?)

2. You have subconsciously put a cap on the number of curves you can accept from the HO now...


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## thom (Nov 3, 2006)

I've eaten a few. One of my subs came back once and asked for more money. Paid him the extra and never called him again. That was the most expensive $150 he ever got. 

He's called me a few times over the ensuing years and I've told him I'm happy with his replacement.


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## boman47k (Oct 13, 2006)

> In 12 years I have never done this


Surely it is not that bad then. Hope not.


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## mdshunk (Mar 13, 2005)

Irving... about how much money are you talking about, anyhow? Can you upsell tthe customer on different finish materials and recover any of it? Will it take food off your table if you absorb the loss? The general dollar amount might put it into perspective and get you different advice.


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## Joasis (Mar 28, 2006)

If this is the only time this has happened in your 12 years, count your blessings. If it doesn't financially ruin you, take the hit and move on...your reputation will be proven in the long run.


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## fci (Dec 11, 2006)

Now we're talken.


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## brian zimmerman (Dec 2, 2006)

maybe you need to see if any extras are missing !


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## Gordo (Feb 21, 2006)

Irving, after reviewing your posts from the past, Is this a service magic job?


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## Gordo (Feb 21, 2006)

thom said:


> I've eaten a few. One of my subs came back once and asked for more money. Paid him the extra and never called him again. That was the most expensive $150 he ever got.
> 
> He's called me a few times over the ensuing years and I've told him I'm happy with his replacement.


:w00t:


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## brian zimmerman (Dec 2, 2006)

I don' think it was a SM lead. they are all dead ended.:no:


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## JNLP (Oct 21, 2006)

I've eaten a few dolloars here & there, but only once had it be alot of money. I nicely came out & told the homeowner I messed up by not taking a few things into consideration (happens sometimes), and I went over budget by X dollars on their house. Told them we had an agreement & I won't break that agreement, but if they wanted to pay the overcost or even half, it would be much appreciated. Come check day they gave me what I went over no questions asked. Have been back there twice now doing more work for them. Being nice & honest with people works well sometimes.


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## Gordo (Feb 21, 2006)

GLK said:


> I've eaten a few dolloars here & there, but only once had it be alot of money. I nicely came out & told the homeowner I messed up by not taking a few things into consideration (happens sometimes), and I went over budget by X dollars on their house. Told them we had an agreement & I won't break that agreement, but if they wanted to pay the overcost or even half, it would be much appreciated. Come check day they gave me what I went over no questions asked. Have been back there twice now doing more work for them. Being nice & honest with people works well sometimes.


Gotta love those clients!


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## pinnacle1 (Dec 4, 2006)

I think that if you bid the job you stick to it. I have done jobs that I realized I didnt bid right but that was my fault and It wont happen again. I strongly believe my reputation is more important than one job. And I would finish the job like I said I would and suck it up. In my bids I put in a percentage for stuff like that. on most jobs I dont use it so on the jobs I screw up all the other jobs absorb it. I now have my company paying for Truck, insurance, fuel, house, employees, materials, and burdens, then my salary, then my company has to make a profit. I have learned there is no such thing as charging too much for exactly the reason you stated. good luck


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## irving (Jul 30, 2004)

All good replies, I appreciate them. No it was not a service Magic lead for the obvious reason that they never close. At least the 37 I bought.

Here is a little twist. The customer had hoped that the bid would be at 80K. It was for 84K. Our contract was for 84K. A couple of weeks ago, out of the blue, he asked me if we were making any progress towards getting the job down to the 80k he wanted. Even though we have a contract for 84k? 

Follow my train of thought for a moment. He is hoping that the final bill will be lower than our contract. Why? Because he wants it to. Well, It could just as easily move up then. He sent me that statement in an email. I have it in writing. In some way that has to be acknowledgement that the bill could change.

I want to honor our agreement. If I have to, it will dramatically slow down the completion. Cash flow is the cause. So if I have to honor the 84K I will have no choice but to delay finishing. This is an addition for twins he and his wife had a couple of months ago. Slowing down the job will be a big disappointment for them. And as a consequence, a problem.

I feel I have the right and the need to increase the cost of the job. Not a bunch, but at least 5K.

Where are my politicians?

And I do feel good this is a first. But it is on my plate today. Thanks for the continued advice.


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## mdshunk (Mar 13, 2005)

irving said:


> I feel I have the right and the need to increase the cost of the job...


Could you ellaborate a little bit? Why so? Increase in material costs? That's what an escalation clause is for; hope you had one. Changes/Adds? That's what a change order is for; hope you got them. You missed stuff when you were preparing the bid? That's why a detailed scope of work is important; hope yours was. 

I certainly understand your need to collect an additional 5K, but I'm not seeing the right yet. Certainly you don't have to prove it to me, but I'm just laying out what I see so far.


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## Rich Turley (Apr 9, 2005)

Irving,

First time in 12 years?, that's great! I was going to tag onto the advise to hold to the bid and move on, it has happened to me. I follow the train of thought that if things go super smooth, and my costs are much lower, I don't refund the money. But at $84k you're in another league than I am and it may not work the same. In fact I have just landed the biggest job ever for me, a 600sf addition and I'm scared to death of ending up in you're position. 

I think I would review things and see if any of those overruns can be classified as 'unforseen' and at least break even.

Rich


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## Mike Finley (Apr 28, 2004)

Irving doesn't want to hear eat it, he said it, he doesn't want to eat it, he is looking for a way around that. It's obvious that the majority of guys here can't even get their heads around doing that. (Which is awesome!:thumbsup: )

I'm not sure you are going to find a magic method of getting around the really only way you can approach this one without an out-right screwing of the customer. Anything that is provided by anyone here that provides any method to get out of your fixed price contract under the quise of it being ethical other than "I f'd up Mr. Customer, can we do something about it?" is not going to be looked at as Kosher by many here.

That being said, really the only fair method is really just an "I f'd up Mr. Customer, can we do something about it?"


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