Taking a Beating

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cdslotz

Senior Member
Also how much higher were the other contractors? I sounds to me like you may have taken the project a little low and now it is catching up.

I've been curious about this from the original post.
Good GC's, (yes there are many) would never sign up a sub knowing he has a huge discrepancy in price.
When I bid jobs to my GC's, I will get a call if something looks out of line. Even when I am the apparent low bidder, I will be called in to their office for a complete scope review where the GC goes through every spec section to make sure I have not left out anything. If it is apparent I have left out, say...third party testing, or coordination studies, or items like all disconnects on HVAC equipment when they are scheduled to be furnished by mechanical, the "good" GC will allow me to add those costs in before he awards the contract.

A "good" GC will never risk their relation to the owner by knowingly sign up a low bid.....never
 
Brief Update

Brief Update

This project is at a standstill. The surety, thankfully, is not eager to stroke a check on the GCs claim to the performance bond.

I bid the job too low. I have spent $950,000.00 on a $865,000.00 contract. The GC told me that my number was good; that they wanted my technical expertise to execute the project. This will not go away anytime soon I suspect.

Has anyone else been in this deep? I would like to keep this thread going to maybe help anyone else from making the same horrible errors that have me chasing my tail and getting deeper and deeper everyday.
 
I've been curious about this from the original post.
Good GC's, (yes there are many) would never sign up a sub knowing he has a huge discrepancy in price.
When I bid jobs to my GC's, I will get a call if something looks out of line. Even when I am the apparent low bidder, I will be called in to their office for a complete scope review where the GC goes through every spec section to make sure I have not left out anything. If it is apparent I have left out, say...third party testing, or coordination studies, or items like all disconnects on HVAC equipment when they are scheduled to be furnished by mechanical, the "good" GC will allow me to add those costs in before he awards the contract.

A "good" GC will never risk their relation to the owner by knowingly sign up a low bid.....never

The GC told me at pre-contract interview that several bids were +/- 3% of my bid. That they have built several of these within this budget. Lies, gotta be.
 

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
My empathy to you,

Are you incorperated?

Do you have 150k in extras in reality?
What GC is going to pay such?
 

growler

Senior Member
Location
Atlanta,GA
The GC told me that my number was good; that they wanted my technical expertise to execute the project.


I'm sure that you have the technical expertise but I'm wondering if this job wasn't a bit to big for you financially.

It's never a good idea to get involved with one job that can break you if the job goes bad. It's that old adage about not putting all your eggs in one basket.

I once worked for a company (20 years back) that lost a lot more on a similar type deal. They were able to dig up more money someplace and are still in business.
 
Can you ask for more money from the GC, I know it's unlikely but be honest and let them know your in trouble. Were you required to get a P&P bond on the project? This is the kind of situation that calls for a statement of duress. I would contact a bankruptcy attorney to protect your personnel assets, and turn it over to him. Otherwise if it's bonded your guarantee will be forfeited and the bonding company's legal dept will figure it out. Which way costs less?
 

cdslotz

Senior Member
The GC told me that my number was good

That GC is a liar and a scum.
I bet the owner is not happy with a GC that knowingly signed up a major sub so he could get the job.
The owner will be drug into a lot of legal issues because of this scum.
I'm sure you're not the only subs that got signed up the same way.
You need an attorney that can come up with claims for the delays and all of the changes you are owed.

Good luck
 

dduffee260

Senior Member
Location
Texas
I bid the job too low. I have spent $950,000.00 on a $865,000.00 contract. The GC told me that my number was good; that they wanted my technical expertise to execute the project.

This is probably one of the most common mistakes on a project. Why do you even need to ask the GC if your number was good? You should always know what your project costs are. What if you were $5,000 lower than the next EC only he did not know his true costs also.

Another thing, you have spent $950,000 but does that include overhead? If you were at $865,000 then your real base costs should have been around $675,000. Did you not check your quotes, feeders, branch materials, subcontractor costs and figure in an amount for labor to come up with this $675,000?

Here is how I come to that number. Take the $675,000 and put the O/H at 10% this would be 675,000 x 10% = 67,500 + 675,000 = 742,500. Then figure in at least a 15% profit on that would be 742,500 x 15% = 111,375 + 742,500 = $ 853,875. This would be pretty close to your original bid. These are just basic figures and each EC could be different.

Many times I have taken projects too low myself and promise I will never do it again, until the next time. What helps me quite a bit is breaking down my costs in sections, then at figuring in my labor. A lot of times I will look at my costs on a project and bump the price. Sometimes this puts me out but the object here is to make money, not to see how low you can build a project.

If you don't have an estimating program then look into one. They will help you on your labor costs. They may sound expensive at first but look at where you are at now. Then how pricey is an estimating program that tells you the real costs of a project.

I would do everything I could to try and finish. If you do finish then you could stay in business and hopefully recoup the costs down the road. Keep us posted and good luck with this.
 
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We are still in this quagmire. We have placed two liens on the job-one for the remainder of the contract monies and another for Change Orders. We have not heard from the owner to clear these liens. Legal costs are becoming prohibitive.

We walked off the job in dispute, trying to force the GC to negotiate with us, when supplemental electricians come on board and began doing our change order work-with our material.

There was approx. $50k worth of material on site, not including light fixtures left to install.

There was $250k left in contract monies, and we completed 85-90% of the work on a $865,000.00 contract.

The GC would not supply us with information about the supplemental labors rates, material purchases, or labor hours. They have demanded yet more money from my surety.

I owe vendors about $250k, and they will not hold off for long on demanding payment.

?Has anyone here had a claim against a payment bond? How aggressive was the surety in collecting their money?

?Has anyone else slapped a lien on disputed monies?

I intend to pay back the vendors / surety gradually if I get no satisfaction from the liens, as the thought of bankruptcy and closing my company nauseates me.

Thank you for your replies. I hope that this can be a cautionary tale for other young business to not get too big too fast.
 

lakeview100

Member
Location
Chicago, IL
Underbid the job

Underbid the job

Were you able to get paid for the change order work? How did the job get closed out?

Have you done jobs that size before? Did something have a big unforseen impact on labor & material, like the height of the theaters?

Was it all due to underestimating man hours?
 

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
We are still in this quagmire. We have placed two liens on the job-one for the remainder of the contract monies and another for Change Orders. We have not heard from the owner to clear these liens. Legal costs are becoming prohibitive.

We walked off the job in dispute, trying to force the GC to negotiate with us, when supplemental electricians come on board and began doing our change order work-with our material.

There was approx. $50k worth of material on site, not including light fixtures left to install.

There was $250k left in contract monies, and we completed 85-90% of the work on a $865,000.00 contract.

The GC would not supply us with information about the supplemental labors rates, material purchases, or labor hours. They have demanded yet more money from my surety.

I owe vendors about $250k, and they will not hold off for long on demanding payment.

?Has anyone here had a claim against a payment bond? How aggressive was the surety in collecting their money?

?Has anyone else slapped a lien on disputed monies?

I intend to pay back the vendors / surety gradually if I get no satisfaction from the liens, as the thought of bankruptcy and closing my company nauseates me.

Thank you for your replies. I hope that this can be a cautionary tale for other young business to not get too big too fast.
,
If you got surity after you , you can loose your license if you don't pay in my state.
They will go after you. you will pay them no matter what unless you sue and win!
 

satcom

Senior Member
That GC is a liar and a scum.
I bet the owner is not happy with a GC that knowingly signed up a major sub so he could get the job.
The owner will be drug into a lot of legal issues because of this scum.
I'm sure you're not the only subs that got signed up the same way.
You need an attorney that can come up with claims for the delays and all of the changes you are owed.

Good luck[/QUOTE

You got it right always have an attorney review your contract so down the line when the stuff hits the fan he is on top of things. another thing that id=s insurance is bidding the job with the help of a professional it is cheap compared to the possible loss

If you have to ask the GC if the price is ok your already in trouble
 
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