T & M Small tool charge out

[Ron Demers]

Gents,
I'm the Electrical Res Eng on a major flood damage project, that was given out by the owner as a T&M. I'm getting killed on the Electrical Contractors chargeout of small tools. The biggest problem is determining a true standard of what a small tool is; this is an IBEW EC. Have any of you gone through this before and is there a standard tool classification for small tools in a T&M Job?

 

[Rewire]

Have you asked the EC? He is probably using NECA standards.

 

[ceb58]

Gents,
I'm the Electrical Res Eng on a major flood damage project, that was given out by the owner as a T&M. I'm getting killed on the Electrical Contractors chargeout of small tools. The biggest problem is determining a true standard of what a small tool is; this is an IBEW EC. Have any of you gone through this before and is there a standard tool classification for small tools in a T&M Job?

I do not know the IBEW operating procedures on tools but I would not charge for tools on a T&M job unless it was a specialty tool that I had to rent for the project or a tool that was so unique that I would probably never use it again. If I were the customer I would not pay for tools such as screwdrivers,side-cutters and such unless I had agreed to it in a contract. If you show up to do a job you should have the tools to do the job.To me its like you telling me you would mow my lawn for $100.00 and show up with out a mower and expect to use mine.
As far as what a small tool is I would consider screwdrivers, cutters, tape measure, strippers things of that nature. I would not consider cordless or corded tools as small.

 

[RD Est]

Hello Ron:

Verify that the tools that are being charged are on the job or required for the installation. Ask for a breakout of these tools to see if the charges are reasonable.

 

[eric9822]

Typically when we pay charges on tools it is for larger items like hydraulic benders or lifts and they are always itemized on the invoice. I would reject an invoiced amount for "misc small tools" or something similar and have them resubmit it with an itemized list with a charge per item. That way you'll know exactly what they are probably nickle and diming you for. Charging for hand tools seems a little bit over the top.

 

[Okie Sparky]

Last contractor I worked for, before going on my own, had a daily charge for 6' ladders, 8' ladders, 10' ladders, hole pullers, cordless drill, truck charge, basically anything other than my hand tools. I was working at an petro-chemical plant, and they wanted me to list tools used in my daily work reports. When I caught on that they were charging for 6' ladders, KO punch kits and other small hand tools, I quit writing small tools down, it was my opinion that if they were charging a daily truck fee, that fee should include the tools normally used and stocked on a service truck (KO punch kit, 6' ladder, extension ladder, etc.). Bigger items like threaders, mechanical benders, hydraulic benders, cable puller, manlift should be charged out at a hourly, daily, weekly, monthly rates.
Yes, I'm on the other end of things, I now work at the same petro-chemical plant and my daily truck charge includes the 6' ladder, KO punch kit, cordless drill, misc. small tools. When I feel that I need to charge for those items, I'll adjust the daily truck rate, rather than loose an account over a 6' ladder charge. (On needs to note that no EC that has worked at this plant in the last ten years or more has sold materials to this plant, due to inappropriate material mark-ups by a previous contractor. We are selling time and renting our equipment. This company is one of the largest propane producers in the US.)

 

[fridaymean]

Gents,
I'm the Electrical Res Eng on a major flood damage project, that was given out by the owner as a T&M. I'm getting killed on the Electrical Contractors chargeout of small tools. The biggest problem is determining a true standard of what a small tool is; this is an IBEW EC. Have any of you gone through this before and is there a standard tool classification for small tools in a T&M Job?

We will charge for anything that is NOT a small tool, unless it is rented for a specific job. If it is a bid job, everything is included, as it should be. T & M can get tricky. I don't see a tool category in the T or the M...... Understand though, that T & M is not the most profitable way for a contractor to contract.... he may be doing the owner a favor.

If the charges are legitimate (have them itemized as other mentioned above) pay 'em. Our service trucks, and the tools they carry are included in our T & M rate. Any lifts, generators, etc would be billed separately, but this would be qualified in a T & M proposal.

 

[MJW]

A contractor that I once worked for had a small tool charge on his T&M billing. He would periodically get audited and and have to provide receipts for tools purchased. If his receipts did not add up to what he charged he had to give money back. I guess the thinking was that he was replacing tools that were worn out on that job. I assume this was covered in his contract and would be tough to enforce without the right contract language.

I could always tell when he was being audited because truckloads of new tools would show up. Oh happy day!

 

[wireguy8169]

Wonder how he would prove he used up some of the core bit, I know that the place I use to rent them and the blades from would weigh them so I would pay a rental fee as well as a usage, but never knew a contractor that did that.

 

[mkgrady]

I have a lot of experience with charging the federal government for tools on change orders whether they be T&M or quoted as fixed price. These include changes that were audited. In these situations it is normal to charge for everything but common hand tools. Tools that are rented for the job are charged at the rental rate plus tax, profit and overhead. Tools that are owned by the company are also charged at a rate equal to the cost of ownership plus profit and overhead and a daily rate is assigned.

 

[Split Bolt]

Wow! I have worked for MANY different ECs in my career, residential, commercial and industrial. I have NEVER heard of this practice. As an owner of an EC, I have costs like these INCLUDED in my hourly rate. If a tool I didn't have would need to be rented, of course I would pass that cost on to the customer, but they would be made aware of the costs ahead of time. Next week, I will be swapping-out a chandelier in a high foyer that will require the rental of a 14' step ladder. I included this in the price I gave her. (I realize that it is not T&M in that case)

Small tools should be factored into the "T" in T&M work, IMHO. Otherwise it would be "T, M & ST."

 

[shepelec]

I never charge for hand tools. I do charge for comsumable items such as Tyvek suits, dust maskes etc as well as drill and core bits. Specialty tools such as tracers or fault location or crimpers have their own rate as they are big ticket items and recieve wear and tear on a job. Power tools and ladders are justifiable as well as they also recieve wear on a job.

 

[rt66electric]

Show me the tools

Show me the tools

When the job is done >>>>>> ask for all of the "used tools" that were bought for that job. What are the serial #'s

 

[cdslotz]

It's different running off a van where the small tool charges are included in the hourly rate. So instead of using say, 35% burden on labor, which is our construction rate, we have 50% rate to cover van/tools.

Now, in major construction you have those costs included. Most EC's, like we do, have tools inventoried, and when tools go out to jobs, they are checked out to that job, and our managers can track what tools are where. I have worked for companies that charge their jobs a shop rate for those tools so that the managers are not complacent about leaving tools on jobs.

Now we don't charge our jobs for tools. We get computer reports on all of our tools, for tool control, AND if we do a large T&M (guaranteed max not-to-exceed) contract, you must have a tool control system in place, to charge for those tools because invoices are audited.
Those charges are justified in such a contract.

To the author of this thread, I assume you have defined in the contract what "small tools" and equipment are, whether it is a percentage of burden or actual tool costs from reports, right?
I also assume that you negotiated the labor rates, burden rates, markup for OH&P in your T&M contract.
I have a hard time believing an owner would write a T&M contract to a GC and subs without vetting these what these charges are.
I don't know what your contract says, but at this point, it is what it is

 

[petersonra]

It's all about what the contract allows for.

If it is not specified in the contract these kind of things should have been clarified up front.

Personally, I hate it when people nickle and dime me like this. I avoid people that do this if possible. It's like the mechanics that charge me for shop supplies. You really think that I should pay for the paper towels you use to dry your hands off as a separate expense?

 

[Ron Demers]

T&M Small Tools

T&M Small Tools

Gentleman thanks for the great response!
I?m the Consultant on this project and had nothing to do with the contract. In this case the contract does not call out what a small tool is, and that?s my problem! As a T&M contract it says very little other than the markup structure and who does what. It could have been done better but the Plant was under 12 feet of water when the Trades were called in and nothing electrical seemed to float. This is a City Waste Treatment Plant and the material to be processed just kept on coming! Overall the Owners did well under the circumstances.
One of you said: all the small tools used and charged for should be turned over to the Owner. Interesting you should say that; we now own all the ladders. It seems that we'll have to re-negotiate what a small tool is and move on from there.
Again thanks for all your input, we now can move on to more interesting items.

 

[cdslotz]

That's tough under an emergency situation like that. You have to react and hire trades that have expertise in that type of work and the manpower to get you up and running.
Not much time or wiggle room for negotiating.
As an EC, you dream of these situations
When the dust settles, you could certainly dispute their invoices and make them itemize every tool cost. You might get some relief.

Good luck

 

[JWCELECTRIC]

Ron,

Check the Spec on the project. It is typical that the EC can charge for tools on public projects along with overhead, profit, product markup, travel.

JWC

 

[CDELECT]

Wow! I have worked for MANY different ECs in my career, residential, commercial and industrial. I have NEVER heard of this practice. As an owner of an EC, I have costs like these INCLUDED in my hourly rate. If a tool I didn't have would need to be rented, of course I would pass that cost on to the customer, but they would be made aware of the costs ahead of time. Next week, I will be swapping-out a chandelier in a high foyer that will require the rental of a 14' step ladder. I included this in the price I gave her. (I realize that it is not T&M in that case)

Small tools should be factored into the "T" in T&M work, IMHO. Otherwise it would be "T, M & ST."

It is a common practice for the guys to expect to get small tools on a project, and if an EC falls for the pitch, the guys on the project will want every small tool there is, until their garage is full, and the all the EC is left with is huge bill for hand tools, and at the end of the job, not a tool around.

 

[nhfire77]

Any chance the small tool charge was due to the fact the EC didn't want any of the customers "product" residue on their hand tools and they were tossing them after the job?

I know we have charged for tools used when we did some pumping stations. All the hand tools (two or three linesmans screwdrivers, stippers) were bought and tossed after, as NO one would work with them due to the icky factor. They got put down on "dirty surfaces" from what I understand.