material mark up without doing the work

Status
Not open for further replies.
Ponchik

Ponchik

Senior Member
Location
CA
Occupation
Electronologist
If I was contracted to do a project for $$$ and decide to pull out because I don't have the man power, (last minute losing employees and now you have to find an electrical contractor who will do the job) but do my due diligence that material arrives on site and I ask you for the cost of the material plus my mark up $4000 will you pay the mark up?

Thanks for your input
 
edward said:
If I was contracted to do a project for $$$ and decide to pull out because I don't have the man power, (last minute losing employees and now you have to find an electrical contractor who will do the job) but do my due diligence that material arrives on site and I ask you for the cost of the material plus my mark up $4000 will you pay the mark up?

Thanks for your input
Click to expand...
Nope.
 
edward said:
If I was contracted to do a project for $$$ and decide to pull out because I don't have the man power, (last minute losing employees and now you have to find an electrical contractor who will do the job) but do my due diligence that material arrives on site and I ask you for the cost of the material plus my mark up $4000 will you pay the mark up?

Thanks for your input
Click to expand...
Return to supplier or keep it for stock
 
I’m assuming here you’re talking about fixtures and/or gear. The price would be whatever it was listed it as in the schedule of values, which would be cost + O&P.

It’s not entirely uncommon in my segment. Jobs get shuffled, schedules get screwed.


Sent from my iPhone using Tapatalk
 
If I'm the customer or contractor, I wouldn't pay anything. I'd likely say come get your stuff. Why?

First, Because I'm gonna spend more than $400 in resources to find another electrician.

Second, if you got the job you probably had the lowest price. Everybody else in more expensive
 
edward said:
If I was contracted to do a project for $$$ and decide to pull out because I don't have the man power, (last minute losing employees and now you have to find an electrical contractor who will do the job) but do my due diligence that material arrives on site and I ask you for the cost of the material plus my mark up $4000 will you pay the mark up?

Thanks for your input
Click to expand...
I would probably tell you to come get your stuff. By the way why would you allow material to be delivered to a project site that you don't have any labor to actually service?
 
Thank you all for your replies. I received the answer that I guessed I would get.
 
2 considerations, who backed out, if you, then likely hard to get (likely hard feelings), but if the customer and have contract, legally you would have right for compensation on materials purchased and sent to site (customer). The markup is your price for materials, any handling fees that would be associated with it could also part of cost to customer.
But given you are walking out either you get the materials back or if customer willing pays for them, might have to cut deal to minimize loss. If this is a large contract, your loss maybe less by getting a sub to help on the job than the loss by not doing the job and and cost for holding unused materials, or the cutting price deal.
At this point it sounds like you're looking to minimize the losses.
 
I am involved in this job as a GC. So one of the sub contractors has decided to pull out because his employees left the company and now up on delivering the material he wants his mark up on the material. Basically he ordered the material through the supplier and the supplier delivered to the site. As a GC I have to go find an installer that is willing to work with me.

Thank you all for your comments.
 
Refuse delivery and start documenting.
I would send a formal request not to deliver any material to the project.
This will spark a meeting to which a successful result may resolve the issue for both parties.

Most likely this contractor has other contractors friends to which they may be able to pick up the contract as long as he can meet the requirements of the contract.
In that case the original contractor can sub to the other contractor as long as there's a subcontractor agreement in place.
This would allow the original contractor to get his markup and pass a part of that to the other contractor to cover his cost of handling, installation and warranty.
The new subcontractor can pose warranty limitations through the contract which would fall back to the original contractor for him to resolve.
All that really depends on the relationship between the subcontractors and the contractor himself.
I myself have been put in that position and perform those type of services.
Or it may be time for the boss to put on tools and get to work.
I would be willing to bet there's other reasons he's wanting to pull out.

All this really depends on the contract that's in place and the details of the contract.
 
edward said:
I am involved in this job as a GC. So one of the sub contractors has decided to pull out because his employees left the company and now up on delivering the material he wants his mark up on the material. Basically he ordered the material through the supplier and the supplier delivered to the site. As a GC I have to go find an installer that is willing to work with me.

Thank you all for your comments.
Click to expand...

What materials were delivered? Pipe & wire, or stored materials like fixtures & gear?


Sent from my iPhone using Tapatalk
 
If I wanted the material due to leadtimes or whatever, I would offer to pay cost on it. If I didn't want the mateiral I would give them a deadline to get it off the jobsite after which time it is deemed abandoned and will be sold according to applicable laws. In either event the material is the least of this EC's worries as he likely has substantial legal exposure for breach of contract. Project delays due to finding an new EC and waiting for materials can be very expensive.
 
The sub has been paid for the cost of material but not his mark up. The material was special order and took about 5 months so I was in a place to refuse delivery.

At any case, I was not willing to pay the mark up fee (because he left me hanging) and seems like most of you are confirming my decision.

Thanks again.
 
Chiming in as a customer: one of the reasons given to me for 'markup' is that the contractor has to handle any warranty issues, even if they are the fault of the supplier.

In other words, if I pay for a plumber to supply and install a sink, and the sink is defective, I expect the plumber to fix things and then handle going after the manufacturer for their lost profits.

I pay for this with the markup.

I expect that whomever does the actual installation job should get the markup in the situation here.

Jon
 
Not sure Jon if that is 100%, for me markup is about my handling, my chasing the parts, my funding of initial purchase (finance charges), time in sourcing and ordering, and if my stock for customer convenience being on my truck. Even at that not sure the markup really covers.
I've never heard of markup being associated with being able to warrenty product installation. It might give a little wiggle room in the budget to fund getting a replacement part until mfg covers the product but haven't seen a MU large enough for complete duplicate of all parts.
 
Markup covers the time ordering/picking ip/delivering materials, as well as warranty issues. It's not "either/or"

But any markup earned for legwork has been dissolved by leaving the GC in the precarious position of having to find a replacement.

It'll take time, which amounts to money
 
Status
Not open for further replies.
Top