Help! Invoice way over contracted price!
We signed a contract to abandon our septic tank and connect to the town sewer for $13,800. While we are happy with the quality of work, we are far away on price. The final invoice was $9000 higher!!! The contractor did compromise to “only” $5500 extra which we still feel is too high. The contract states that any changes involving extra cost be agreed upon in writing. It also excludes rock excavation. We knew they hit rock and there would be some extra cost, but despite asking they would not put a number on it so we could make an informed decision to continue. Equipment was brought in without us knowing how much it would cost. He’s charging 2 days @ $1000/day for backhoe hammer and operator. I totally agree that that’s a fair cost for me to absorb. BUT he’s also charging for additional labor @ $3500/day (3 guys plus backhoe & operator) that he claims was added as a result. Initially it was 2 days and he compromised to one day. I still think that’s high– we never agreed to a daily rate for labor nor to a total job time so I don’t know if it was made longer or not. My gut feel is MAYBE 1/2 day longer. The whole job took a week which is about what I expected. I want to be fair but at the same time I don’t think I should have to roll over and pay whatever the contractor asks just because he says it costs that much. The $2000 is already more than we budgeted but it’s do-able. Can anyone share similar experiences (from either the contractor or homeowner side) or have any tips? Thus far everything has been friendly and I’d like to keep it that way. I don’t want to end up on Judge Judy!! 🙂
Replies
from a contractor's
from a contractor's perspective:
I once had to rent a hammer hoe and it was $2000 a day or $7000 aa week. We had it for a week. OK - the company I work for paid for it. Then there is the cost of handling and potentially removing the rock from site. So, there is other equipment envolved and then labor too.
We here can't see the specifics of your contract, but I will say that everytime rock has been hit on one of our projects it was a total budget buster. On one of my sites it cost a half mil... On another site they hammered on some rock for 3 days to put in maybe 30' of sewer line. And that was even after the area had been blasted. It's big bucks...
As a side note when we rented the hammer hoe I got to play... If I remember correctly it was a 270 series. Talk about the feeling of power. Think of something the size of a small house rotating around via your hand controls and then reaching aout a gigantor arm suspending a 12,000 lb hydralic hammer... awesome... :-) They are only fun to operate for about 20 minutes though. After that the fillings in my teeth started to rattle loose. The reason these machines are so expensive is that they literally beat themselves to death. I think someone once told me that the hammer assembly only lasts a month. If I remember correctly the rental cost was roughly 1/2 for the machine and 1/2 for the hammer.
I don't think I'd pay that
I don't think I'd pay that either. His failure to establish labor rates in advance, and to get changes in writing shows very poor business practice. $1000/day for rockhammering is about what it costs me, although there are different sizes of machines and hammers, and the cost varies. $3500/day for 3 guys plus a backhoe/operator sounds high. I would figure maybe $100/hour for the machine and operator, plus $150/hour total for the three men (just wild guesses here, of course) and that's $2000/day. Are you in downtown Manhattan or something?
I would not cut a check at this point. Ask for a complete, itemized billing for everything, including what the $13,800 paid for. Get him to lay every hour of man and machine time out on paper. If he wants to convert a fixed price contract to T&M billing, ask to see the backup. Two can play...
I will say that I've been in your shoes not so long ago, and ultimately paid the final bill. In this case it was a house full of drywall. My chosen sub came in with one number, agreed to some changes without giving me a new price, and then gave me a final bill that seemed too high. I asked a couple of other drywallers to review the pricing and they were right in the same range, which to me meant that cost and value were in line, in spite of my sub's poor business skills. I raked him over the coals and paid him.
The cost/value thing is what makes this so difficult. I've had estimates from $10-20k-- the cost of excavation is all over the place. And no contractor wants to come in and second guess somebody else's job especially over a few thousand dollars.
The rock was shale which broke apart in small thin pieces and got used for backfill. The equipment was a wheeled loader/breaker that he rented (Cat 420 I believe and the breaker looked like a big nail).
There wasn't much space to work so some time was spent jockeying around the backhoe and hammer which wouldn't have occurred otherwise. But the fact that it was onsite for 2 days doesn't mean the job took 2 days longer. And it certainly wasn't hammering for more than a few hours the entire time.
I'm willing to go as high as 1/2 day extra labor ($1750) plus the $2000 rental cost which he itemized. And my wife is raking me over the coals for that extra $1750 since there's no way the laborers are really making $80-100/hr. And why did he back down from his initial bill right away if he wasn't trying to way over-inflate it?
I think $3750 is within reason and if it's not top dollar then that's the price the contractor has to pay for not following the terms of his own contract and getting overages authorized in writing. I wanted to end this on good terms though.
Ugh. I HATE hiring people to do stuff.
Well someone needs to pay for his Xmas!
Don't pay this crook. We had
Don't pay this crook. We had a contractor build a porch for us under contract. Toward the end he presents us with a bill for an additional $12,000 for work spelled out in the contract. We sued his a$$ and it looks like he'll be paying for the work we hired someone else to complete.
Wow, don't you think calling
Wow, don't you think calling the guy a crook is a little harsh?
Since the revamp it seems like the mix of pro's to diy'ers around here has gotten pretty lopsided...even as a diy'er I can reconize that that is not a good thing.
Bashing contractors as 'crooks' won't earn you any love around here.
That said, in reply to the OP.
Your contractor F'd up. He should of never gone ahead with the work without having you sign a change order. Offically no change order no additional money spent by you.
Now, that said, it looks like the Pro's here are agreeing that the extra costs you've been quoted are reasonalbe ie he's not gouging you.
The job could not of been done with out these additional costs right? So, you've got to ask yourself if at the time you were presented a change order would you of been willing to abandon the project? If not then you should pay him the extra cash but I would negotiate him down a bit so that he'll remember to get teh change order signed before its too late the next time.
With all due respect, you have some good points. It is his fault for not putting some values in the contract. It is also his fault for not coming to you and sitting down to discuss this increase in contract effort that just about doubled the contract amount!!!
Labor amounts ... you should know the local hourly cost ... or could estimate it. Say a guy being paid $40/hour ... that ends up being say $80-100/hr w/ the total burden (benefits, OH&P, etc.). Unless necessary, the machine shouldn't have to sit idle for half a day. If the guy knows what he's doing, he should be in and out.
You are VERY right to scrutinize such a bill. It's ridiculous for him to do $9K worth of additional work w/out so much as a 'well gee we ran into some real serious problems here'.
A reasonable estimate of the excess should be good. You can call the rental company for machinery rental. Don't forget, it takes the contractor time to pick up and drop off the machine. You have a solid contract to protect you. Use it to resolve in an equitable manner. The guy shouldn't skate for failing to engage you in a significant issue. He should be taking a big hit (and learning a lesson). And it's good business to tell him that.
No contractor should "submit" a bill to you
at the end of the project. Maybe that's how it's
done in the restaurant business, but not in the
building business. In the building business, a
detailed contract should be signed PRIOR to the work being
done. Homeowners are not supposed to be "surprised" with a bill at the end (Side note: this new forum layout is
terrible)
Mike:
All well done excavation contracts I have deal with have rock clauses. So, the work ends up costing the contracted amount PLUS the amount needed for rock romoval. In the case of the OP, it sounds like the contract was weak in that the excact price per hour, per cubic yard, etc, for the rock was not spelled out, plus the contractor messed up by not comming to the HO with the problem and at least giving some estimates, if not hard numbers as to how much it would cost to resolve the problem.
Good points. And if any contract should be well done and spell out unknowns, it is a contract dealing w/ the most unknowns .... what you can't see underground.
I know that here in PA, anything above and beyond the contract price needs a change of work order signed by both parties. If not done, and the work proceeds, the contractor doesn't have a leg to stand on, billing-wise.
Steve
We ultimately came to a compromise... we ended up paying $3000 additional but that was offset by a $2000 credit for cleanup work not performed due to weather. So in the end we paid $1000 more than the original estimate and we have to live with a messy, muddy driveway until spring. That's sure better than paying $9000!!
And he got his money right away, which I think was most important to him even though it was 1/3 of what he was asking for.
I definitely know to watch out for this kind of thing in the future and make sure _everything_ is in writing.
Thanks everyone for your input.