We do not always get purchase orders for extra work. Sometimes we go ahead with the work and then bill them later. Sometimes this has got us in trouble and we have had a hard time getting the money. We find if we wait for the purchase order it takes an extra day or two and puts the job behind. Also your have to give a firm price to get a purchase order for the extra. Some of the extras are hard to put a firm price onto. Can you get a purchase order for time and material cost basis? If they verbally tell you to go ahead with the extra is that a legally contract? We do a lot of retail stores with tight work schedules. Is they any ideas out there? Anyone do a lot of chain retail stores in the malls etc. Is there any other forums out there more suited to Commercial / Retail Contractors?
Thanks, Ace
Replies
Yes, purchase orders can be issued for T&M work.
Verbal contracts are as legal as written ones (except for real estate) but much harder to enforce ("I didn't say that.")
Note that some firms have successfully avoided paying for work performed because the person who okayed it didn't have the authority within the company to do so.
Why should you give a flip how longs it takes them to issue a PO? Sure, you want to keep the customer happy, but issueing a PO for a change order is all under their control, not yours. If they want it to happen quickly, it will. Be helpful, friendly, responsive, but firm. An authorized signature on a written chenge order and you'll get right on it!
Much of this can be set up in advance. The orginal contract should spell out which individuals can approve a change order. Let them decide on the balance between timeliness and centralized control. If they don't want to give their local guy total control, you can have tiered authorization levels. (e.g. John Smith and Bob Jones can approve up to $5,000 chnage orders. The area manager is authorized up to $20,000. etc.)
Often a sample, blank change order is made part of the orignal contract. This makes it very clear that everyone agreed at the beginning.
Ace,
Dave is on the right track. One key element of successful construction is sequence of operations. Changes are also part of the work. In order not to alter your sequence, yet accomodate the client's change, confirm the verbal go-a head in writing (describe the scope of the work in detail) by fax to the proper authority, and the basis of payment for the change (T&M, lump sum, not to exceed, budget), including any affect on schedule ( most important if there are liquidated damages associated with completion). In the fax, announce that you will proceed with the change and incur reimbursable costs for which they will be responsible, unless they respond in writing to the contrary within 24 hours.
This should cover you for cost and schedule, and not adversely affect the relationship with your client. It also shows a degree of professionalism in controlling your business. I assume that you already have a signed agreement in place for the base building work. If not, you better start there!!!
Phil