In case you don’t think it’s important to have change work orders signed and paid BEFORE making a change to a contract, read this note I received from a homeowner yesterday:
Just hoping you’d be willing to share your opinion regarding my situation which is as follows:
Met with a contractor to have a look at our job which was remodeling a small bathroom. We had a few different contractors give us quotes on the job. We picked this particular contactor, not because his quote was the lowest (it wasn’t), but because of a friends reference + his thoroughness and presentation. His quote was $14,500.
So, as the job got underway, we inevitably ran into issues and surprises, most of which he spoke to us about and let us know verbally how much it would cost to take care of this additional work. We recorded these instances and budgeted for them. It was 5 times, each with an approx $1000 price tag.
The day came when they were a few days from finishing and he presented us with the final invoice. The total on the invoice + the additional needed to complete the job was $29,000.
Needless to say this was an increase I was not at all expecting. From what he had led us to believe I was expecting approx $19,500 with the potential for a couple extra thousand.
What I am struggling with is how, if these costs are legitimate, how he can assume it is totally fine to present us with an invoice substantially more than double his original quote.
Is he not responsible in some way for totally mismanaging the job and poor communication? I now even question whether or not all of the additional costs are real, he does seem to have an answer for everything, but to just be all of a sudden presented with something so mind boggling makes me wonder if I’m being swindled.
I know this is just my side of the story and it may be difficult for you to answer based on the limited information I’m presenting, but I would still value your opinion in this matter . . . I just don’t know what to do.
I personally feel that no matter what he actually spent on the job, he is responsible for honoring his verbal and original quotes and anything above and beyond that which he did not speak to me about is not my problem. I am fine with small executive decisions which here and there may add up to $1,000 to a job but $10,000 above what was spoken about is above and beyond reasonable.
Straight from the homeowner. Get signed change work orders, follow proper business procedures. This is how it looks from the homeowner’s point of view when you don’t, and it’s not pretty.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations as needed.
wpDiscuz