Price adjustment

[ceb58]

Want to see what you would do. Customer (local gov. angency) supplies shop drawing for building, clear count on light fixtures, recp. elect. heat units nothing hidden or strange. You submit your bid to GC. GC in turn submits his bid for building and every thing associated. GC wins contract per supplied drawings. Now customer comes back and decides to delete walls which in turn reduces the amount of fixtures, recp. and heat units. Would you now adjust your price due to deletion of equipment? Since it is a gov. job you have no way of knowing if the GC will lower his price. He bid the job as drawn. Not his fault for them not knowing what they wanted. He nor any one else would keep the same price if they wanted more added. What would you do?

 

[scwirenut]

it is customary for you to reduce your price by the amount of the material less markup, the profit stays. also, this would have to be done by means of a change order by your GC. its not your biz what happens between the GC and owner.

 

[nakulak]

wait for them to ask you for a credit. If your price was based on lump sum buy from supplier, make sure you have all ducks in a row before giving back a dime (restocking fees, handling (by supplier as well as you), office work (time you have to spend dealing with the paperwork etc), etc)

 

[mkgrady]

Technically this is a change to your contract (if it happens). You need to look at what your contract says about changes. If it is silent, you can try for anything you want. Most contracts with government agencies have specific language of how changes are priced. On a federal project you would have to give back all your cost savings and your markups for profit and overhead.

 

[Cow]

it is customary for you to reduce your price by the amount of the material less markup, the profit stays. also, this would have to be done by means of a change order by your GC. its not your biz what happens between the GC and owner.

That seems like a good way to go about it. You make just as much profit on the job even though you're using less material. I like it.

 

[satcom]

wait for them to ask you for a credit. If your price was based on lump sum buy from supplier, make sure you have all ducks in a row before giving back a dime (restocking fees, handling (by supplier as well as you), office work (time you have to spend dealing with the paperwork etc), etc)

Not many guys see the big picture, at times the cost can go up, not down when items are removed. when you know your actuals, it is easy to make any adjustment up or down.

 

[wamegojim]

Keep in mind the cost of altering drawingsand time communicating the "change order" to the field.

 

[Sierrasparky]

Keep in mind the cost of altering drawingsand time communicating the "change order" to the field.

Keep track of everything! As was said,even deleting something from a job can cost more in the end.Office time or overhead should be taken into account. It could take hours and several employees to accommodate the change.