Can I charge for preparing a quote?

Status
Not open for further replies.

Coppersmith

Senior Member
Location
Tampa, FL, USA
Occupation
Electrical Contractor
Summary: I was asked to quote a rather large job with no design documents available. In order to quote the job I had to first design the system. I didn’t win the job so I wasted a lot of time and money preparing for the quote. Should I have been able to charge the client for my initial design work (which would have been turned over to them with my quote)?

The long version: About a year ago I received a call and was asked to quote a job at a storage facility. There were no other bidders as far as I know. I was told they had a mechanical company install four air conditioning systems spread around the facility. The job was to run power to these. It sounded simple enough.

I came over for a site visit to take a quick look around. I expected to spend about an hour gathering sufficient data to make an informed quote. The owner of the facility gave me a tour. It was a converted multistory factory building. He showed me each of the A/C systems. There were no prints or specifications, not even a sketch of what they wanted, or of the facility. They didn’t have a copy of the nameplate data. They had no idea where the power would be run from.

I ended up making three site visits and a bunch of phone calls to gather enough data to make the quote. I gathered the nameplate data which included going out on roofs and balconies. I searched for all the panels near the units to see if I could power them from there. (All the panels were full, so I could not.) I asked to see the electric rooms. Turned out there was only one and it was tucked in a far corner of this huge building. All the panels in there were full.

I decided another service with a main panel in the electric room and a new tap to the service drop was needed. This required calling the POCO engineer to find out if it could be done and how much it would cost. I measured the distance to every A/C machine, calculated voltage drop, wire size and pipe size. I determined the pipe routes, pipe supports, and wall/floor coring required.

I think it’s reasonable to say that all of the above information should have been supplied to me in design documents. Once I had gathered it all, I was able to price out the job. Bottom line: I spent a bunch of hours, i.e. money, designing this system and finally making the quote. And I didn’t get the job.

Normally, I don’t charge for quoting a job. I think prospective clients expect a free quote or estimate. Normally, jobs that are big or complex have design documents already prepared. This one did not. Thinking back on it I’m wondering if I should have said something like “Since you don’t have any design documents, I’ll have to prepare some before I can quote this job. The design documents are yours to keep and if you don’t like my quote, you can use them to get quotes from other contractors. Since it’s going to take a significant amount of time to prepare these, I will have to charge you $XXX.”

My question is: Is this something that contractors do? I wasted a lot of time and money trying to quote this job. If I ever see one like this again, I would have to decline to quote if I could not be compensated.
 
We usually do, unless its a rollout where we have a couple of hundred to do, and we can make it up on the jobs. Most of the time we get the work I design, but on occasion, once I design it, they will farm it out for others to quote. One such large customer did that, but the competitor didn't install it with the components I spec'd, so naturally they were cheaper. After they installed it in about 100 stores, and found out it wouldn't work, they had to pay us to go behind the other contractor to put in the right component for it to work. They saved zilch on that one! LOL!
 
Summary: I was asked to quote a rather large job with no design documents available. In order to quote the job I had to first design the system. I didn’t win the job so I wasted a lot of time and money preparing for the quote. Should I have been able to charge the client for my initial design work (which would have been turned over to them with my quote)?
.........
Quite an interesting one. Especially your comment about the lack of design documents. I can understand that you might have won the bid. Frustrating even. What can I say..............win some, lose some? I know..........
 
Here’s a good article. Yes, it’s remodelers and builders, but the information is good across various trades.

I sometimes ask for a rough estimate on items.
I always say I don’t expect the exact number, but just a rough estimate for budgeting purposes..
When I ask for a bid, the specs are given at that time.
 
Yeh, I’d have told them up front there would be a design fee. In my experience, they usually balk when you say that, which tells me what I need to know.

Had one very recently; 20k/ft store that had been closed, someone broke in and over the course of I assume a couple of weeks they picked the electrical and hvac systems clean from the building.

Owner of the building had no original drawings, asked me to quote putting it back together as it was. Job was 2.5/hrs away from me.

I gave him a quote for travel and design services to even quote the job, told him I’d waive it if awarded the job. He flipped out on me over the phone, called me a crook, said no one else was charging him to give estimates. Told him I couldn’t help him any further and ended the call.


Sent from my iPhone using Tapatalk
 
He flipped out on me over the phone, called me a crook
Ever since I became a contractor I have regretted what I said the day I had a guy come over and give me a quote to paint my 1400 sq ft house. I figured it would cost me $500 to do myself and maybe $1,000 to have somebody do it for me. (Obviously, I didn't understand the costs of running a business.) When he told me $5000, I told him he was nuts and said no thanks.
 
Yeh, I’d have told them up front there would be a design fee. In my experience, they usually balk when you say that, which tells me what I need to know.

This was definitely a "boiling a frog" situation. I didn't realize how much time I was going to put into this quote until after I had already put it all in. Inexperience. I hope I will recognize the warning signs next time.
 
This was definitely a "boiling a frog" situation. I didn't realize how much time I was going to put into this quote until after I had already put it all in. Inexperience. I hope I will recognize the warning signs next time.
I'm sorry you went to all that trouble for no profitable result. This is definitely a case where you would have been justified in asking for a design fee. I hope you didn't give the customer the detailed information you gathered. That was proprietary to your quote. Otherwise, I'm sure they shopped the site conditions you uncovered to other EC's. I can't even say that would have been unethical on their part. As far as they were concerned, free is free.
 
Ever since I became a contractor I have regretted what I said the day I had a guy come over and give me a quote to paint my 1400 sq ft house. I figured it would cost me $500 to do myself and maybe $1,000 to have somebody do it for me. (Obviously, I didn't understand the costs of running a business.) When he told me $5000, I told him he was nuts and said no thanks.
1400 square-foot house. Walls ceiling and trim? If you balked at $5000 you’re either a sucker for punishment, or you just love painting. I hate painting so much I would’ve hugged his neck if he told me $5000.
 
Just like with anything, if you don't put your two cents in upfront, then the burden is on you.

That said, we do a fair amount of design build for our loyal customers. But, in the last few months,, we've bowed out of some RFP's for a design build church and auto dealership. No thanks, too much time spent trying to come up with a good solid project at a fair price, just to have someone else cut corners, get the project, and then change order the customer to death. Been there, done that.
 
1400 square-foot house. Walls ceiling and trim? If you balked at $5000 you’re either a sucker for punishment, or you just love painting. I hate painting so much I would’ve hugged his neck if he told me $5000.
I realized when I read your reply that I didn't say this price was for the outside only.
 
I haven't decided who I dislike more: people who have honest reactions (so I know where I stand); or people who say they will call me back and never do.
I'm more likely to reply, "That's outside our budget. I don't think we can make this work." Then there may be a counteroffer, but if I thought for some reason that the cost should be 1/3 what was quoted, I'd tell the contractor "We are so far apart, I wouldn't insult you with the price I thought this was going to be."
 
You wouldn’t stand a chance of getting paid now but tell any future customer you have to charge for such a quote. And don’t give too much detail in the quote; specify wire, not 1000 feet of 250 MCM, etc. He can use your documents to get quick quotes from others & may even tell them your numbers.

We once had a chiseler who used our detailed quotes as a material list, bought the stuff & did the jobs himself, trial & error.
 
Status
Not open for further replies.
Top