Time and Material Job

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i think, and this is my opinion of what satcom was referring to, is that the companies you work for and the 1-3 man shops out there are apples and oranges.

for the 1-3 man shops, T&M work is not much different than working for someone else hourly...except you don't necessarily get paid for all the hours you work.:D Very rarely are their contracts in place for this type of work. And typically, the contractor will give a ballpark, or NTE, price and end up taking all the risk, while giving the customer all the reward. Since there typically is no contract, the T&M contractor is relying on the goodness of the customer to actually pay the total amount billed. An unscrupulous contractor knows that they can now haggle, successfully, with the contractor. You've already provided all your material and labor, without a contract. Most states make it illegal for you to remove what you have installed. You've now put yourself in the following position:

1) you probably charged a rate that is lower than what you really need or want
2) you don't have a signed contract
3) you've already done all the work
4) legally, you can't take anything back
5) you have 2 options, haggle with the customer, or go to court. If you go to court, see Item #2

So, if you proceed to do all of the above to yourself, I agree with Satcom, you are not a contractor.

You are a guy with a license and not a clue what to do with it...
 
t&m talk

t&m talk

i shut down about two years ago and i remember it was close to the elections in 1992 when i decided to get away from g.c's! prior to that was the period sub contractors went through "playing games with general contractors who held their money to draw interest on it". at the time i was growing leaps and bounds, and as you know when you expand it puts you in a money crunch (like add four men). well i had been reading an article in the trade magazine about "eventually sub contractors would work directly with owners" --- the reasoning was that many of the general contractors did little to co-ordinate their jobs!!! and about this same time turner construction owed my 130k retainage and was overdue on it's payment. understand - the punch list was about 3/4" thick and it was a two floor high end law firm tenant. we did not have one item on the punch list ---not a screw missing or lamp out!!! we had to deal with a woman accountant they had hired from new york and she was a pro at holding back payments. i asked her " you are 60 days past due and i would like to know when i will get my retainage?". she said "when the punch list is done!". i explained "we have never had an item on the punch list". she then said "let me put it a different way--- you will get payed when everybody's punch list is completed and-- when i f@$%in feel like paying you"! i almost feel over!!! but i did tell her before leaving her office that this would be the last job we ever do for turner construction--and it was!!!

turner and the other g.c's we worked for would call asking for estimates on different jobs---we told them we don't work general contractors!! that floored them!! at this time i also reduced our hourly rate for t&m work. the economy was like it is in todays market (before the election) and i wanted to lock-in enough t&m accounts ---understand we were a very low overhead shop and felt we could compete with anyone--thats why we were growing so fast.

i have had major building managers tell me "if you ever run out of work, call me, i'll find work for your men". "heck, i'll have them changing light bulbs!". and before i retired the last was t&m and 385k, and when i met with the owner of that business to introduce him to another contractor who was taking over my accounts he told me " you know something charlie --- i never ever looked at the bottom line on any of your bills --- seen your company's name and signed it". "the main reason was because you were always here when you said you would be"! and as stated above --i know alot of accounts where three or four men are assigned the year around.....
 
emahler said:
i think, and this is my opinion of what satcom was referring to, is that the companies you work for and the 1-3 man shops out there are apples and oranges.
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You have never made any statement that your posts apply only to small shop and small shops are not the only represented here at Mikes.

Very rarely are their contracts in place for this type of work.
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The truth is we do have T&M contracts.

They spell out terms like:

The various rates, additionally charges for trucks and mileage, minimum charges for same day response, how fast we must respond when called etc.

All I am saying is that there are many ways to run a successful business and if you can not admit that then we have nothing to talk about.

Of course I readily admit I have never, nor plan to run a business. But I do go through life with my eyes wide open. I don't wrap myself in only one view of anything.
 
charlie, you were an anomaly...glad it worked out for you. I do know that we don't have the opportunities to do it anymore like we did back then. We can run service work all day at T&M, but larger projects come up...everyone wants hard numbers...c'est la vie...
 
emahler said:
charlie, you were an anomaly...glad it worked out for you. I do know that we don't have the opportunities to do it anymore like we did back then. ...
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I would say that you should say in your market, or how you are willing to work.

Look, if what your doing works for you great....really I am happy for any successful EC.

But other ECs work differently and they to are successful and happy.
 
bob,

i fully agree with you (hey did a pig just fly overhead?)...i think that while many people know that you work for a large shop, some don't. just trying to make sure that people understand the viewpoint that you are coming from.

in our area (NY/NJ) the opportunities to do $200,000 build outs on a T&M basis on not that abundant. Simple as that. We can run service work and small projects ($10,000+/-) on T&M with no issues...but the big ones, not so much

and you are correct about it not just being small shops here...but would you be willing to guess the breakdown of shops under 10 field men vs. shops with over 10 field men? I'd wager a much higher precentage of the former...

I still stick by the feeling that most larger, successful shops, did not get there by T&M work. They get there on projects, and T&M becomes gravy...Just my feelings.
 
emahler said:
I do know that we don't have the opportunities
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the key word being 'we'...as in us...as in our area...as in our customer markets...as in 'we'

is that better? happy thanksgiving
 
I was planning on giving you the last word but then that pig flew over my head and blew my mind.

I will have to agree the 'big' money comes from contracts. :smile:

Of course then the issue of overcharging comes up. :grin:

But thats best left for another time. :)

You and your family have a great thanksgiving. :smile:
 
2 of our engineers have been doing work for a single client. one for about 2 years, another for almost 5. the whole thing has been done on an hourly rate basis. they work X hours in a week, the client gets a bill for X hours.

I am not even sure our managers know what they are doing most of the time.

I see one of them at our monthly lunches pretty regularly. The other one I see maybe once every 3 or 4 months.
 
its funny

its funny

bradleyelectric said:
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.
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I think its funny how at times the customer thinks they set the price. I have not been able to find a gas station that I can pull up to and run in and say,"hey $3.20 sounds kinda high, will you take$1.25 a gallon"?
 
I have been at the same jobsite for the past 12 years with between 2 and 40 electricians working for me....all T&M. If you have a fair and honest contractor, the client will almost always come out ahead on T&M. The key is for the contractor to set a T&M rate that will let him make a reasonable profit.
Don
 
define fair....
i will add, in my world, the order of importance is
1) my family
2) my employees and their families
3) my customers

if i'm not fair to #'s 1 & 2, then it doesn't matter how fair i am to #3

if you can truly be fair to all 3, more power....i'm not saying it can't or doesn't happen...
 
don_resqcapt19 said:
I have been at the same jobsite for the past 12 years with between 2 and 40 electricians working for me....all T&M. If you have a fair and honest contractor, the client will almost always come out ahead on T&M. The key is for the contractor to set a T&M rate that will let him make a reasonable profit.
Don
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Yes, if the contractor sets a T&M rate that will allow him to make a reasonable profit. All too often many contractors do not know their real costs, so for them to set a profitable rate is rare.
 
emahler said:
and you call milking a job for 12 years fair?


:D Happy Thanksgiving
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Wooooo! He may of been going on going fit up work, that can go on for years. We had some High Rise buildings, where the work never seemed to stop, always a new job waiting.
 
The reason that I say the client comes out ahead on a T&M is the he is assuming the risk. On a contract I have to assume the risk and the client pays me to do so. Like I said the key is the correct labor rate set by the contractor for the T&M work. If you can't set that correctly, you probably don't make any money on contract work either. In both cases you need to know your true costs per hour.
and you call milking a job for 12 years fair?
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Sure, our billings to this client average a over $1,000,000 per year.
Don
 
satcom said:
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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As long as you set your hourly rate high enough to make money, you will make money. I once had a T&M job that I had from 1-4 guys on for 1.5 years. Made a boat load of money. Did an emergency job last night T&M and made more money last night than I did last month at a bank branch contract job we are doing. These big T&M jobs don't require a lot of scheduling hassles that little service jobs do. I'd love to do all institutional T&M work.
 
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