Service Contract?

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I was recently approached by a wastewater plant about the possibility of being their exclusive on-call electrical contractor. The plant is under the authority of a small municipality. In the case of a call, they want an electrician on site within 2 hours.

What sort of agreement is the standard for an application like this? A service contract? Or 'per event' pricing? What is the worth to a wastewater plant to have a contractor on site within 2 hours?

I realize every part of the country is different, but I would appreciate your input.

We are located in northern New England.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
I have had some experience with the 2 hour on call type contracts. In my experience, it is near impossible for a small contractor to actually meet this obligation.

What are you going to do - tell another customer you have to leave their job half done to go take care of someone more important than them?

The problem with the 2 hour deal is that even if someone is available, there is no real guarantee that by the time you track him/her down, he/she can get to the site with a service truck UNLESS you require some employee to have the service truck available at all times. In most cases that means you will need to compensate him for that inconvenience. You will also need to pay for the extra costs associated with a pager or cell phone to get in touch with the guy, and the extra insurance costs associated with being forced to allow the employee to use the service van for personal business so it is available to him fast enough.

I suggest charging them a high enough monthly fee that it is worth it to you to set up these arrangements, and then just charge them your normal call out rates for the actual service work.

BTW, in my experience, it is rare that when you actually need them that they can actually make it to the site in 2 hours. It sounds like a lot of time, but especially in urban areas where the employees live in the suburbs, it is very tough.
 

brian john

Senior Member
Location
Leesburg, VA
We have numerous maintenance contracts, these contracts have scheduled work associated with them, so there is money in the contract whether we ever get an service call or not. We try to do GOOD service and avoid having to respond off hours, but it happens. Most contracts have a call back time of four hours (this seems pretty typical), with a man on site in 4-6 hours. In 22 years with rare exceptions we have always had someone there in 1-2 hours. . We try and avoid leaving the customers site for another site but emergency calls is one of the services we are known for. We explain to the customer if they were in an situation we would leave some one else's site for their emergency.

We have had customers that want these service contracts. I tell them, in all the years you have known me have you ever had a problem getting us here in an emergency? Avoids the paper work.
 

RUWIREDRITE

Senior Member
Emergency Service

Emergency Service

I agree with brian on alot of what he stated. We also have a full service company that can usually handle an emergency in 1-2 hours or less.In the event my employees are too busy to drop what there doing to assist I
have a fully stocked emergency vehicle in which I drive to pick up the slack. Even as an old dog ,I can even still do what is needed.We do alot of sewage contracts on a 24 hour basis depending on their needs.Sometimes I wish I got hazard pay for the stuff we gotta deal with. As for the charge, in the event of an emergency, We charge portal to portal $75 dollars per man per hour as long as it's during normal business hours.
 
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brian john

Senior Member
Location
Leesburg, VA
I also pick up a lot of the emergency calls to avoid bothering the men, or to allow me to access what will be needed to make repairs. We charge a 4 hour minimum and if you think about it during normal business hours, a guys has to pick up the job he is on, drive to another job make the repair and return to his 1st job, four hours barely covers that with DC traffic.

On overtime we pay portal to portal with a 4 hour minimum.
 

SurfSide EC

Member
Location
Newport, NC
I would say first off you have to have the manpower to make that kind of guarntee, or at the very least a loyal customer base. We do a lot of WWTP work and have had to pull off a job to go answer an emergency and customers have been understanding. One thing I try to assure current customers is that they would receive the same promptness if they were the one with the emergency. WWTP can be much more urgent than other jobs because of the spill hazzards. We have worked late, weekends and holidays to keep a plant running or repairing pumps/control boxes so that a spill does not occur. If you are going to do that kind of service work, you may want to look into owning or having access to a back-up generator. Right before Christmas we got a weekend call at a plant where the service was blown out and they had no power. We had no access to the 3-phase equipment to replace so we had to hook-up generatro power to keep them going until service could be replaced. Although we had the new service in Monday morning,it was Tuesday afternoon before POCO and inspections were done.
 

SurfSide EC

Member
Location
Newport, NC
I forgot to add to charge for the work. It is no fun crawling around and/or messing with sewage. We charge $100/hr for WWTP. Don't forget your shots. We did the complete vaccination a few years ago. It may seem like overkill, but there is a lot of potential exposure on these jobs.
 

RUWIREDRITE

Senior Member
Back up

Back up

Surfside,
Most of our clients with waste water management already, by law,have back up electrical generators in place. The prime mover power is usually not the issue of there emergency calls. Mostly pumps and controls to what we seen.
Just my 2 cents
 

Dnkldorf

Senior Member
Great advise on these posts, guys!

Can I add, read the contract, if they wrote it.

Look for the clause, if it has one, about material at cost!


Some contracts word this in, assuring you no profit on materials, so make it up on your labor rate.

May not be the case with your contract, but they are out there.
 

SurfSide EC

Member
Location
Newport, NC
RUWIREDRITE said:
Surfside,
Most of our clients with waste water management already, by law,have back up electrical generators in place. The prime mover power is usually not the issue of there emergency calls. Mostly pumps and controls to what we seen.
Just my 2 cents


By law I think ours are, too, but it doesn't seem to be enforced very well. The ones that do have back-up are so old that they are a good portion of the work we do. Most problems are pumps and controls, but back-up power is a selling feature for doing their work, at least here. Do you have sewer service fee or is it the same as all others. Sometimes they have somebody to pull the pumps and even drop them off and the fee may not be as high.
 

RUWIREDRITE

Senior Member
Service Fee

Service Fee

Surfside,
We have a company that does all of our removals of sewage equipment, We just do the troubleshooting and wiring ,besides new installations.We ain't that crazy to go scuba diving in peoples stuff.
 
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