Time and Material Job

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bpk

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I recently was asked by a Contractor that I do some work for to bid a Log House. I decided that I wouldnt be able to give an accurate bid because I have only wired a few log houses in my career. I ended up meeting with the homeowners and they asked if I would be able to do it T&M, I told them I would. Do other contractors do T&M jobs based on there service call rates or do they charge a little less hourly because it will be more sustained work. The contractor or HO have never asked me my hourly rate yet. The owners are also both doctors. Thanks
 
I am close to completing a nice job which I agreed to do T&M. I quoted my standard rates, and the homeowner had no problem with it. This whole job will come in at about $8K, so it might be a bit less than the one you're asking about.
 
cha-ching!!$!$!$!$ i have two hourly rates: 7AM-5PM, and 5:01PM - 6:59AM. Its better for both of us if you fall into the first category.
 
Had a funny little service call episode yesterday. Woman opening a store wants me to do a little troubleshooting on some lighting, re-aim some spot heads. She is doing a lot of things at a time and leaving me standing at times. I figure she figures I'm working for handyman rates. She asks me if I want a deposit for parts I'll have to bring on a return trip. I say yes, pay me for 2 hours now to cover today. She is suprised at the cost and asks "what about the guy that was coming yesterday for $20/hour that didn't show up" ? I informed her he didn't come and I could have not come for $10/hr. She paid and wanted to know when I'd be back.
 
I am curious about the relevance of the homeowners' career choice in your question. Do hourly rates depend on the client's wealth? I'm going to start telling people I pump gas for a living if that's how it is. :grin:
 
drbond24 said:
I am curious about the relevance of the homeowners' career choice in your question. Do hourly rates depend on the client's wealth? I'm going to start telling people I pump gas for a living if that's how it is. :grin:
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I remember an instance working for my old boss, when he was dealing with a GC...There was a porsche in the driveway, apparently belonged to the GC, when we went inside one of us commented on the porsche, and he denied it was his, then proceeded to start trying to get my boss to come down on his quote for the work. Then it was found out the porsche was his, and he was quite well off. He denied it was his so that 1. the quote didn't go up and 2. he could attempt to work the quote down (I believe this was a job not in writing). The whole thing made him look like a fool and paranoid in a way.
 
drbond24 said:
I am curious about the relevance of the homeowners' career choice in your question. Do hourly rates depend on the client's wealth? I'm going to start telling people I pump gas for a living if that's how it is. :grin:
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one Lexus in the drive =price one
two Lexus in the drive = price two
old Chevy on blocks= keep driving
 
JES2727 said:
I am close to completing a nice job which I agreed to do T&M. I quoted my standard rates, and the homeowner had no problem with it. This whole job will come in at about $8K, so it might be a bit less than the one you're asking about.
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JES, be careful with doing residential T&M projects that large...in NJ, anything over $500 requires a written quote...and a sharp, and lecherous, customer can legally avoid paying you on a project like this...it's just something to keep in mind..
 
emahler said:
JES, be careful with doing residential T&M projects that large...in NJ, anything over $500 requires a written quote...and a sharp, and lecherous, customer can legally avoid paying you on a project like this...it's just something to keep in mind..
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Ya did you see what they fined that EC from south jersey that went over the $500 look at the Board meetings and all the EC's fined, he is in jersey.
 
emahler said:
JES, be careful with doing residential T&M projects that large...in NJ, anything over $500 requires a written quote...and a sharp, and lecherous, customer can legally avoid paying you on a project like this...it's just something to keep in mind..
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satcom said:
Ya did you see what they fined that EC from south jersey that went over the $500 look at the Board meetings and all the EC's fined, he is in jersey.
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I thank you both for the advice. I will be more cautious in the future.
 
mkgrady said:
So how can you work T&M that exceeds $500 in New Jersey?
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They do not work T&M, they do an estimate, and price the job with a contract, the only guys that have problem, are usually the ones that don't know how to estimate, If your in contracting it is best to learn how to estimate, working T&M is not contracting, it's hourly labor, your not going to make much of profit, if any from working hourly.
 
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iwire said:
Is that a bad thing?

We have had people working T&M for years at the same locations.
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No T&M is not always bad, if the job is completed in less time them then an estimate, then it is not good for a business, they gave away the potential profit.
Bob, some companies can also profit from T&M, they may have long term work, or plenty of backlogged seheduled work, the average small EC, may not have thise conditions, and would not do as well.

As you always say every case, and every place differs, I am not anti T&M, there is a place for it.
 
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the $500 limit is for residential...there really is no way to legally work T&M for residential over $500.

Bob, very few companies make money on T&M. It's used for various reasons. Expendiency (sp?) is one. It's easier to send a guy to a customer, do the work and send a bill, than figure out what it will actually take.

But, I will say that most of the companies that you have worked for have made their money on contracts...they have serviced their customers via T&M. I'd also bet, that their T&M rate was lower than the rate they used for their contracts.

but that's just my guess....
 
contract vs t&m ???

contract vs t&m ???

contract and t&m have their place in our industry..... with today's material and labor costs it doesn't take much to reach $500.00! certainly there is more profit in contract work -- but there is also a cost to estimate a contract and then there is money added for job conditions,etc.. and don't forget the problems of timely draw payments........ i was in business for 25 years--- the first 10 years i dealt with g.c's requiring contract work along with my service work which was t&m. during this period i used my same labor rates for t&m as i did with my estimates on contracts. 95 per cent of my headaches were from my contract jobs. the job headaches along with the problems of begging g.c's for my money caused me to concentrate our efforts to working directly for building owners --- stopped working for g.c.'s altogether. at this time i reduced my t&m rates to reflect savings from estimating and the headaches.. for the next fifteen years we really had an "easy ride". never ran out of work and never had to chase our money. now, i'll be the first to admit that we probibly didn't make as much profit, but i'll trade the profit for the headaches. when i retired, we had the highest credit rating available at any of our suppliers and did not owe a dime to anyone.... the last job we did was a $385,000. "T&M" job.............
 
charlie, when did you close down?

in the late 80's/early 90's we did $3mil/yr T&M...we would regularly do $200-$300,000 jobs T&M...these days, those opportunities are rare....
 
We have (and even though I have changed employers the customers have moved as well) accounts with at least 3 business that have one or more of our guys full time T&M.

This has been going on for years now.

At times one of these customers has had four people T&M for months at a time.

We are now in talks with another business that is looking for two guys for a couple of years at T&M.

These typically are industrial plants that want support for the in-house electricians that they have.

I am sure the profit margin is tighter then some contract work but it is reliable income.
 
exactly...but it you are only a 2-3 man shop, T&M is not a way to make money and grow...it's a way to pay your bills...that's the gist of satcom's post.
 
emahler said:
exactly...but it you are only a 2-3 man shop, T&M is not a way to make money and grow...it's a way to pay your bills...that's the gist of satcom's post.
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All I asked satcom was a simple question.

Is working T&M a bad thing?

Many ECs do make money working T&M and I think that is as important as promoting flat rate concepts.

To say that working T&M 'is not contracting' is rather insulting, or at least that was how it cam across to me. We have contracts with some of our T&M customers.
 
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