GC Buying Material

[knot stable]

Got a GC that wants to buy the material for a job an wants to just pay me an hourly rate. I never had this happen. Anyone deal with this before, I just feel like he's trying to screw me. I don't know what he gave the customer for a price so it makes me wonder.

 

[mcclary's electrical]

Got a GC that wants to buy the material for a job an wants to just pay me an hourly rate. I never had this happen. Anyone deal with this before, I just feel like he's trying to screw me. I don't know what he gave the customer for a price so it makes me wonder.

You feel like he's trying to screw you, because he is trying to screw you.
Add your mark up that you would have made off the house to your hourly rate.

 

[satcom]

Got a GC that wants to buy the material for a job an wants to just pay me an hourly rate. I never had this happen. Anyone deal with this before, I just feel like he's trying to screw me. I don't know what he gave the customer for a price so it makes me wonder.

Sure no problem, just let him know you are in business and your hourly rate includes all youroverhead and operating expenses and it is also, not a non burdened labor rate.

This way he should not be shocked when you give him a $70 to $90 or more hourly rate.

 

[growler]

I just feel like he's trying to screw me.

You did say that he is a General Contractor, right? :roll:

It's the GC's job to try and screw you and it's your job to make sure he doesn't.

If your contract states that you can use as many helpers as you like and take as long as you want and that you can't be terminated for any reason and you are to be paid in cash everyday it very hard to get screwed.

It really depends on what your contract states.

 

[Rewire]

your feelings are correct. you loose on material markup plus you loose when going hourly over a bid price. think of this you take 8 hours at 100/hr thats 800.00 but you bid it for 1000.00 and complete in 8 hours thats 125/hr

 

[480sparky]

Who is going to guarantee the work to the owner? You, or the GC?

Something goes wrong, and the GC will say it's your poor installation. You will say it's his crappy material.


Best advice is, don't even do it to begin with. State your price, including your materials. If he balks, you walks.


If you truly want the job, then state there will be no warranty on the material at all. And your hourly rate goes up as well.

 

[revolt]

I do not warranty material purchased by others or material purchased at cost.I put that in my proposals. I have installed fixtures with out the bulbs and the owners stand there staring at you like you just molted. There is an old saying in the electrical biz. "Ye who buys the fixtures also buys the bulbs"

 

[readydave8]

I do not warranty material purchased by others or material purchased at cost.I put that in my proposals. I have installed fixtures with out the bulbs and the owners stand there staring at you like you just molted. There is an old saying in the electrical biz. "Ye who buys the fixtures also buys the bulbs"

and often it says on the package bulbs not included.

keep some on your truck & mark them up x 4? if they don't want to pay offer to wait (by the hour) while they go to the dollar store?

 

[CopperTone]

we are about to start a 6000 st ft custom built home for t & m . We supply all material except light fixtures. We are charging our regular hourly rate for a licensed electrician which includes labor burden, overhead, profit, etc. We also mark up the material 20%. We make all stock runs on the clock or have them delivered. We work steady but we don't rush or work/run like we might on other lower bid jobs we sometimes do. It is a great money making job.

there is nothing wrong with t&m unless the GC wants you to work for wages only and provide the material to you to install - no way - run away from that situation.

no warranty for any material provided to us. Plus, you are screwing yourself the markup of the material. you are in business to make money right?

Ask the GC if they are passing the savings along to his customer - no way - they are in business to make money too (even if it is your money they are making/taking) - it may pain you today to say no - but you will be happier years from now when you are doing well and making good money for your hard work.

I say no all the time to chiselers - I've even laughed into the phone at some of them (i don't recommend that though- sometimes that angers them)

 

[hardworkingstiff]

I agree with the others, the GC is trying to take some of your profits.

Your labor rate will have to go up to make up for the lack of profits on the materials. If the GC has any sense, he knows this. He is trying to take your money.

It's a hard decision sometimes. If you are slow, this may look attractive. There has been more than 1 thread about standing your ground, let the job go, no take a job at any profit just to keep working and make something, etc. etc.

There is one forum member that routinely said you have to adjust to the economy and take jobs where the market will price them instead of walking away. After a while, he was asking about what it was like working at the big box stores and what kind of money you could get paid taking a job in electrical maintenance. The point is, taking jobs at reduced rates to keep working can be a losing scenario. But...... you do have to eat.

My recommendation is to have a discussion with the GC. Tell him you understand that the economy is tight and we are all trying to get by. There are costs that he does not see when he supplies the materials. He will probably want you to give him a list of materials, is he willing to pay you for your time to make the list? Since you are not in control of materials, is he willing to pay all lost time if something is missing? How would he feel if a customer said "I want you to build my house, but I'm going to hire all the subs directly and you manage them, plus give me a list of the lumber you need and I'll put it on the job site?

It's not a good path to start down. The GC will probably be able to find someone to play his game, so it's up to you to sell him that although it looks good to him, it's just not the best way. Or, I guess you could be that someone (I would not recommend it).

Good luck.

 

[haskindm]

Knot Stable,
Please see the post titled "Defective Materials" to see why you MUST supply your own material and make a decent profit on the material.

 

[poeboy]

Early on I did a job very much like the one the OP is describing. The GC was a friend / buddy of mine and we agreed that any warranty stuff would be determined by the pair of us to see if it was workmanship or material failure.

That job never had any warranty work so it seems like I got real lucky.

These days I will use customer supplied items, but only for external superficial replacement items like lamps, cord caps. Very occasionally for some industrial customers that have their own maintenance electricians, I will use their pipe and wire as well (My point is they are NOT GC's..... weather or not it matters seems important to me).

 

[stevenje]

There is always an easy solution to this scenario. When the GC wants to furnish the material tell him fine. Give him a time that you and the crew will be there and you want the material waiting for you at the jobsite. He will of course ask you what material you need and then you tell him he is responsible for the material which includes knowing what is needed to complete the job. Getting the material is the easy part. Any monkey with a drivers license can pick up parts. Knowing what to buy is why they hire an EC.

 

[cdslotz]

If I do a job where the owner wants to furnish fixtures or switchgear (the big ticket items), that's fine.
I mark up a job based on my margin $ per man/hr.
I try to keep that figure no lower than $18 to $22.
All of your risk is in the labor. If you have an all labor job because of owner furnished equipment, you need to mark up as if you were furnishing those items.
I lose jobs all the time to EC's that don't understand that.
Move on to the next one.

 

[hillbilly1]

The GC may have screwed up and underpriced the job and is trying to make up the difference. Everything is going so cheap now it's ridiculous, Jobs that we bid a year ago, are now giong 50-100 thousand less now. Don't know how someone would be able to cut their price that much and stay in business! We just lost one we thought was cheap on, but the competitor for the contract dropped his price nearly $50,000 below us! This is going to hurt everybody IF we ever come out of this recession, GC's will still want the same prices.

 

[readydave8]

If I'm working by the hour and not furnishing materials, I try to act like an employee rather than a contractor. Instead of prep the day before I go to the job first. If I need something I go get it on company time. Of course I'm furnishing tools and equipment but that goes into labor rate.

 

[knot stable]

Thanks for all the input, I really do not have good feeling about this so I am going to walk. It would be nice to have the work but this guy is stead fast on getting the material so "on to the next one".

 

[zappy]

Thanks for all the input, I really do not have good feeling about this so I am going to walk. It would be nice to have the work but this guy is stead fast on getting the material so "on to the next one".

I think you can make it work with a very detailed contract.

Signed daily and paid daily.

 

[satcom]

I think you can make it work with a very detailed contract.

Signed daily and paid daily.

Provided he pays the burdened electricians rate, not some non burdened hourly rate the GC pays his general labor, and the first day he misses a payment, your out of there like a rocket.

 

[electricmanscott]

There is one forum member that routinely said you have to adjust to the economy and take jobs where the market will price them instead of walking away. After a while, he was asking about what it was like working at the big box stores and what kind of money you could get paid taking a job in electrical maintenance. The point is, taking jobs at reduced rates to keep working can be a losing scenario. But...... you do have to eat.

.

You can use my name.

Taking jobs at reduced rates has kept me afloat. It is not my general operating philosophy but it has worked.