t&m OR Bid

[MBLES]

I have a customer that own a apartment complex who just got hammered by
the city. He would like to get a bid for Hourly he will provide material or bid.
He got hammered on a/c units no disconnect and loose conduit on roofs.
I havent seen the work yet i will go there on monday. Any advise on how I
can bid job. He has 530 units all got hit with missing or misinstalled disconnects. I was thinking about charging him per disconnects and only
wire from load side to a/c unit. Any wire on line side extra to panel.

 

[bkludecke]

I hate it when the customer wants to furnish the materials. Mark-up on materials is part of the way I make my money. I also never know exactly what materials I'll have to work with. If I were looking at this project I would do it hourly and bump my rate up 10%-15% to make up for the money I leaving on the table in material mark-up.

At least that is what I would have done 2 years ago when there was plenty of work. These days all bets are off. It's a sure bet someone will get that job cheap. Good luck.

 

[Dennis Alwon]

I would only do this job as a T&M esp. if you don't know everything that needs to be done. You could possibly give a high estimate so he/she has an idea of what the job will cost but I would definitely work T&M.

I had a restaurant owner want to supply materials for a job he wanted me to do. I asked him if I bought a steak and gave it to him to cook for me would he be okay with that. No way is someone else going to supply all the materials for my job.

 

[bradleyelectric]

I'd look at the job and formulate a price. No way I'd limit myself to wages. The price would be the same if he supplied the materials or I did. His materials may be difficult to work with and may take more time to install.

 

[satcom]

I hate it when the customer wants to furnish the materials. Mark-up on materials is part of the way I make my money. I also never know exactly what materials I'll have to work with. If I were looking at this project I would do it hourly and bump my rate up 10%-15% to make up for the money I leaving on the table in material mark-up.

At least that is what I would have done 2 years ago when there was plenty of work. These days all bets are off. It's a sure bet someone will get that job cheap. Good luck.

They would never try to bring their own parts to the auto mechanic, because he would lock the door and kick them off the property, but with an electrician he should have no problem finding one that will beg to get the job and loose money on the material mark up.

Bid the job one bottom line price.

 

[480sparky]

To add insult to injury, they always buy the cheapest material they can. That equates to needing more labor to install it, or nail-on boxes that do not have the volume you're used to, or need more stuff to install it (i.e., you need to supply hanger bars, a j-box and a whip to correctly install the can lights they bought for $3).

 

[Rewire]

T and M is the only way you are not getting stuck. To many unknowns and variables for a bid. As long as he realizes he pays for down time waiting on materials if he wants to supply them. One thing for sure you never underbid T&M.

 

[rt66electric]

offer to show receipt

offer to show receipt

Whenever I have a customer that is "worried" about part/costs, I offer to show them the receipt. Out of all my customers only one or two have asked to actually see it, and then I have manange to overbuy the parts necessary and return or reuse the leftovers.

 

[Sparky555]

T and M is the only way you are not getting stuck. To many unknowns and variables for a bid. As long as he realizes he pays for down time waiting on materials if he wants to supply them. One thing for sure you never underbid T&M.

My experience has been that there is no profit in T&M. All the large business assets I have are due to bid contracts, not T&M. If the customer supplies the materials I deduct the materials at cost from the quote. The material markup and profit stays in the quote to pay for the additional labor involved in installing cheap materials or supplying materials they didn't get.

 

[satcom]

My experience has been that there is no profit in T&M. All the large business assets I have are due to bid contracts, not T&M. If the customer supplies the materials I deduct the materials at cost from the quote. The material markup and profit stays in the quote to pay for the additional labor involved in installing cheap materials or supplying materials they didn't get.

I agree over the years we always did better with a contract price, T & M would almost always lead to problems, with how long your taking, to payment problems.

 

[macmikeman]

I agree over the years we always did better with a contract price, T & M would almost always lead to problems, with how long your taking, to payment problems.

For me the word always is not always. There have been some bids I did that were underbid. Live and learn. By and large though the bids outdid T+M jobs in profit, no ifs ands or buts about it.

 

[bikeindy]

Whenever I have a customer that is "worried" about part/costs, I offer to show them the receipt. Out of all my customers only one or two have asked to actually see it, and then I have manange to overbuy the parts necessary and return or reuse the leftovers.

So you just LIE to them if you need to show a receipt. I choose not to do business that way. try explaining to them why you use the materials you use and that even if you stock it on your truck there is time involved in getting the materials and stocking them. That you are offering a warranty on your work and the materials you use and if you install their materials there will not be one. Try doing business a little more professional and it will help out the rest of us.

 

[growler]

He would like to get a bid for Hourly he will provide material or bid.

First thing off. You can't bid a job T&M if the customer is providing the "M". You would only be biding the labor cost, or giving an hourly labor price.

Now when it comes to hourly labor prices the cheapest bid is the contractor that can put the least skilled, lowest paid labor on the job. That's probably how they got into trouble in the first place.

When you talk to these people ask if they would like any kind of warrranty on this work because you don't warranty materials purchased by others. Why would you because you didn't make any money on it.

Then ask what they are wanting an hourly rate for, master, journeyman or apprentice. Explain that an hourly rate covers all time spent on this job to include getting permits, picking up materials, meeting with inspectors, everything associated with the job to include paperwork.

If they want to supply materials get them to open an account at a supply house for ordering materials. Remember that any of your time dealing with materials is billable.

Remember that it's what your contract states that determines if you make money. If the contract is in favor of the customer and gives them all the advantage then you lose. If they want a labor price make sure you get regular payments and don't let them get into your pocket.

The problem with jobs like this is that they want you to quote wages and not billable rates.

Just hire a lawyer at a billable hourly rate and see if he loses any money working by the hour. You will end up paying for a phone consultation while he is playing golf.

 

[satcom]

The problem with jobs like this is that they want you to quote wages and not billable rates.

Just hire a lawyer at a billable hourly rate and see if he loses any money working by the hour. You will end up paying for a phone consultation while he is playing golf.

Good way to sum it up, but some guys still insist they can make money working for wages only, the sad part is most of these guys are usually hard working with some pretty good electrical skills, and all they need is some knowladge of how a business needs to operate to continue and produce decent profits and good net wages.

 

[nhfire77]

I agree with raising the rate. If he is a good customer, tell him you will give him $XXX/hr (emphasis on the third X) You will gladly install his equipment at that rate, and you estimate say 3 hours for each disconnect. Then, stress, IN WRITING, the estimates will only go up from here and not to be surprised if its 4 hours.

Now, you can take you time, not milk it, and make money. (unless you want to milk it and can get away with not making the guy feel hosed)

 

[hardworkingstiff]

T & M would almost always lead to problems, with how long your taking,

This IMO, is the #1 reason to not work T&M.

 

[satcom]

When a job this size gets a bid price, it may look like a lot of money, but T&M will only fool both you, and the customer into thinking it will not cost that much.

 

[ceb58]

I have a customer that own a apartment complex who just got hammered by
the city. He would like to get a bid for Hourly he will provide material or bid.
He got hammered on a/c units no disconnect and loose conduit on roofs.
I havent seen the work yet i will go there on monday. Any advise on how I
can bid job. He has 530 units all got hit with missing or misinstalled disconnects. I was thinking about charging him per disconnects and only
wire from load side to a/c unit. Any wire on line side extra to panel.

You will be screwed ether way. If there is a problem with all 530 units then some one has not been doing the right thing for years. If you give a price per hour (to include what you missed out on on mark up) he will look for some one to do it cheaper. If you bid the job ether by the unit or as a whole. He will still bid shop you. They make their money doing as little as possible for repair and maintenance to the building. The only hope for this job is it is nearing the end of the year and he needs a wright off. Ether way you do it make sure it is in writing.

 

[satcom]

You will be screwed ether way. If there is a problem with all 530 units then some one has not been doing the right thing for years. If you give a price per hour (to include what you missed out on on mark up) he will look for some one to do it cheaper. If you bid the job ether by the unit or as a whole. He will still bid shop you. They make their money doing as little as possible for repair and maintenance to the building. The only hope for this job is it is nearing the end of the year and he needs a wright off. Ether way you do it make sure it is in writing.

It sounds like the typical property manager, looking for a guy green eniough to fall for the city is beating him up, not the city finally caught the electrical work I had done by my $8 an hour master electrician who worked with the cheap material I supplied, now all you have to do is fix 20K worth of work for $2K and he can give you a lot of work, you will be my electrician, I wonder where I heard that before?
Just make up the loss, on the volume of work, it's simple the more units he has, the more money you can loose.

 

[milehiwire]

I work on the management end of the business and feel my only job is securing work to keep my crews busy. I have completely revamped and have gone from large contract work to negotiated T&M and small bid work for about 75% of my yearly volume.

I must say that I have been very blessed this year and in this economy both in T&M and bid work. I have kept my crews busy and have made a profit.

I attribute most of it to women property managers being enamored with old Harley riders?? . JK.