How to argue with the contractor on construction overruns
January 19, 2015 9:40 AM Subscribe
How do we argue/negotiate with our contractor on construction overruns without being jerks?
Beans and snowflakery inside.
We are building our vacation/retirement home in Northern Wisconsin, while we are in Illinois, 300 miles away. We worked with an architect, who recommended the contractor. Due to a number of circumstances, the architect did not submit detailed plans. However, the contractor assured us that he could build the house from the plans we did have. We were also able to obtain necessary permitting from the plans. We did not alter the plans in any way during the course of construction, with the exception of removing an enclosed porch in favor of a deck. We were given a bid, which while not super-detailed, the bank did accept for our construction loan.
There were mumblings of cost overruns during the course of construction, which we were prepared for; one of which were extra-tall triple-hung windows, which were a VERY important feature of the design - which was communicated numerous times, and were called out in the plans. The contractor failed to actually quote these and found that they were $28K over his estimated window cost. As they were integral to the design, we had them installed.
We made some concessions on other features (exterior stonework, removing second floor heating system, replacing a screened in porch for a deck, etc), knowing the budget was taking a bit of a beating.
Additionally, the timeline has taken an additional 8 months, due to weather and lack of skilled workers.
We met with the contractor over the weekend and he mentioned that our house has lots of nooks and crannies (architect-designed) and has taken lots of extra materials and now the price of materials has gone up. He is proposing that we pay for the extra materials and the increased pricing and he will eat the labor costs. We received his numbers (to-date) this morning and the amount is more than a little alarming.
We think that we should not have to pay for his errors in bidding; he had the data that he needed, nor are we to be held responsible for the costs associated with the extended timeline. We will pay for finishes we requested that exceeded his bid's allowances.
We are very pleased with his work, just not this last bit. To complicate things, he expects to finish within the next month and get paid, but there is still some exterior work to be completed when the weather warms up, in another few months. We don't necessarily want to piss him off before everything's completed.
We've not responded to his suggestion that we pay for the material overruns; it's the first salvo in this budgetary conversation; we'd like to work this out amicably, before pursuing this with an attorney.
How would you traverse this?
We are building our vacation/retirement home in Northern Wisconsin, while we are in Illinois, 300 miles away. We worked with an architect, who recommended the contractor. Due to a number of circumstances, the architect did not submit detailed plans. However, the contractor assured us that he could build the house from the plans we did have. We were also able to obtain necessary permitting from the plans. We did not alter the plans in any way during the course of construction, with the exception of removing an enclosed porch in favor of a deck. We were given a bid, which while not super-detailed, the bank did accept for our construction loan.
There were mumblings of cost overruns during the course of construction, which we were prepared for; one of which were extra-tall triple-hung windows, which were a VERY important feature of the design - which was communicated numerous times, and were called out in the plans. The contractor failed to actually quote these and found that they were $28K over his estimated window cost. As they were integral to the design, we had them installed.
We made some concessions on other features (exterior stonework, removing second floor heating system, replacing a screened in porch for a deck, etc), knowing the budget was taking a bit of a beating.
Additionally, the timeline has taken an additional 8 months, due to weather and lack of skilled workers.
We met with the contractor over the weekend and he mentioned that our house has lots of nooks and crannies (architect-designed) and has taken lots of extra materials and now the price of materials has gone up. He is proposing that we pay for the extra materials and the increased pricing and he will eat the labor costs. We received his numbers (to-date) this morning and the amount is more than a little alarming.
We think that we should not have to pay for his errors in bidding; he had the data that he needed, nor are we to be held responsible for the costs associated with the extended timeline. We will pay for finishes we requested that exceeded his bid's allowances.
We are very pleased with his work, just not this last bit. To complicate things, he expects to finish within the next month and get paid, but there is still some exterior work to be completed when the weather warms up, in another few months. We don't necessarily want to piss him off before everything's completed.
We've not responded to his suggestion that we pay for the material overruns; it's the first salvo in this budgetary conversation; we'd like to work this out amicably, before pursuing this with an attorney.
How would you traverse this?
Contractor employee here. This jumped out at me:
There were mumblings of cost overruns during the course of construction, which we were prepared for; one of which were extra-tall triple-hung windows, which were a VERY important feature of the design - which was communicated numerous times, and were called out in the plans. The contractor failed to actually quote these and found that they were $28K over his estimated window cost. As they were integral to the design, we had them installed.
Um, what? We would have taken those drawings to a window supplier (or two or three, depending on what the customer requested), who would have given us a set price for the package based on what was spec'd. Absolutely nothing would have been ordered unless you had signed off on all of it, including the cost. This is outrageous as your have written it here.
As for the other cost overruns, if we quote you a price, that's what you're paying. If changes are made on your end, we would do a change order and the extras would not happen you were in full agreement on the price. If we run over on labour, that's our problem, not the customer's.
I'm also curious how your quote was presented to you originally. Could you provide a little more information about that?
posted by futureisunwritten at 10:48 AM on January 19, 2015 [3 favorites]
There were mumblings of cost overruns during the course of construction, which we were prepared for; one of which were extra-tall triple-hung windows, which were a VERY important feature of the design - which was communicated numerous times, and were called out in the plans. The contractor failed to actually quote these and found that they were $28K over his estimated window cost. As they were integral to the design, we had them installed.
Um, what? We would have taken those drawings to a window supplier (or two or three, depending on what the customer requested), who would have given us a set price for the package based on what was spec'd. Absolutely nothing would have been ordered unless you had signed off on all of it, including the cost. This is outrageous as your have written it here.
As for the other cost overruns, if we quote you a price, that's what you're paying. If changes are made on your end, we would do a change order and the extras would not happen you were in full agreement on the price. If we run over on labour, that's our problem, not the customer's.
I'm also curious how your quote was presented to you originally. Could you provide a little more information about that?
posted by futureisunwritten at 10:48 AM on January 19, 2015 [3 favorites]
Yes to the above comment, but let me give you another perspective....
Materials in my industry have gotten pricey lately. (Weather has effected availabilities, etc..) Is it possible construction materials costs have risen lately due to similar circumstances?
From what you describe, I don't think he is trying to fleece you, nor do I think he should eat the costs on this. You like his work. When he's done, you will keep the house forever.
I do think you need a 3rd party professional to weigh in on his latest proposal. It's not fair to make him pay for and build your house. Likewise, if he's exaggerating his expenses and over-runs, you need to know.
In general, it reads like things were not hyper-detailed, and you left the door wide open for this to happen. Everyone thinks contractors are crooks (and some are!! I know a bunch of them!!) but this doesn't sound intentional, just accidental/par for the course under the circumstances you've detailed.
I hope you come to a resolution and enjoy your new home for decades to come. Find someone in your area to help you make sense of the particulars. Good luck!
posted by jbenben at 10:53 AM on January 19, 2015 [1 favorite]
Materials in my industry have gotten pricey lately. (Weather has effected availabilities, etc..) Is it possible construction materials costs have risen lately due to similar circumstances?
From what you describe, I don't think he is trying to fleece you, nor do I think he should eat the costs on this. You like his work. When he's done, you will keep the house forever.
I do think you need a 3rd party professional to weigh in on his latest proposal. It's not fair to make him pay for and build your house. Likewise, if he's exaggerating his expenses and over-runs, you need to know.
In general, it reads like things were not hyper-detailed, and you left the door wide open for this to happen. Everyone thinks contractors are crooks (and some are!! I know a bunch of them!!) but this doesn't sound intentional, just accidental/par for the course under the circumstances you've detailed.
I hope you come to a resolution and enjoy your new home for decades to come. Find someone in your area to help you make sense of the particulars. Good luck!
posted by jbenben at 10:53 AM on January 19, 2015 [1 favorite]
I'm not your architect.
You are going to get answers all over the map, because most people have limited experience with construction or know their little piece of the big world of it. The bottom line is that in order for you to have the respectful conversation you would like, you also need to know what you are legally entitled to, and what you are legally obligated to pay. And that varies on many many factors including the exact documents included in the contract, subsequent agreements (which ideally should be written and signed, but depending on other factors could be binding in other circumstances), and so forth.
You had an architect do the initial design work and recommend the contractor. Did they help you vet and sign the construction contract? I assume from what you said that they aren't involved during construction, or this would be their charge to lead. Are they willing to get involved now? Are you willing to pay them a fair amount to do so? If not, then you should absolutely get an attorney to at least help you understand where you stand legally. Nothing breaks down a negotiation faster than people drawing indefensible lines in the sand.
Ask the contractor to document in writing all of his claims. What specifically is he claiming caused cost increases and how much did each item contribute to the added cost. Likewise make sure he lists each and every 'concession' and how much it saved. From there you can analyze each in isolation. Was it a change to the documents? Was the weather significantly more severe than reasonably expected? Was the labor challenge unusual and not reasonably anticipated? Did you ask for things not shown on the drawings? Are the values listed for each item fair and substantiated (with labor hours and material costs)? Perhaps most importantly, was the contract you signed for a hard cost of construction or did it have allowances for the contractor to recover costs in other ways?
Good luck!
posted by meinvt at 11:13 AM on January 19, 2015 [1 favorite]
You are going to get answers all over the map, because most people have limited experience with construction or know their little piece of the big world of it. The bottom line is that in order for you to have the respectful conversation you would like, you also need to know what you are legally entitled to, and what you are legally obligated to pay. And that varies on many many factors including the exact documents included in the contract, subsequent agreements (which ideally should be written and signed, but depending on other factors could be binding in other circumstances), and so forth.
You had an architect do the initial design work and recommend the contractor. Did they help you vet and sign the construction contract? I assume from what you said that they aren't involved during construction, or this would be their charge to lead. Are they willing to get involved now? Are you willing to pay them a fair amount to do so? If not, then you should absolutely get an attorney to at least help you understand where you stand legally. Nothing breaks down a negotiation faster than people drawing indefensible lines in the sand.
Ask the contractor to document in writing all of his claims. What specifically is he claiming caused cost increases and how much did each item contribute to the added cost. Likewise make sure he lists each and every 'concession' and how much it saved. From there you can analyze each in isolation. Was it a change to the documents? Was the weather significantly more severe than reasonably expected? Was the labor challenge unusual and not reasonably anticipated? Did you ask for things not shown on the drawings? Are the values listed for each item fair and substantiated (with labor hours and material costs)? Perhaps most importantly, was the contract you signed for a hard cost of construction or did it have allowances for the contractor to recover costs in other ways?
Good luck!
posted by meinvt at 11:13 AM on January 19, 2015 [1 favorite]
Response by poster: To clarify, the architect did recommend the contractor and is, in fact friends with the contractor. The architect was not in a position to oversee any construction contracts, due to personal issues, though in a later conversation, as we were already under construction, he did say that he thought the contractor had underbid the project.
All we were given was a bid, which we both (we and contractor) signed, which the bank took as "the contract" It was nothing more than a list of items needed to construct the house (excavation, foundation, roof, heating system, windows, cabinetry, plumbing, electrical, etc) with the prices or allowances needed to execute each item. This was the only contractual document. We've gotten budgetary updates via spreadsheet.
There were no signed change orders for any work done outside of the bid.
posted by sarajane at 12:41 PM on January 19, 2015
All we were given was a bid, which we both (we and contractor) signed, which the bank took as "the contract" It was nothing more than a list of items needed to construct the house (excavation, foundation, roof, heating system, windows, cabinetry, plumbing, electrical, etc) with the prices or allowances needed to execute each item. This was the only contractual document. We've gotten budgetary updates via spreadsheet.
There were no signed change orders for any work done outside of the bid.
posted by sarajane at 12:41 PM on January 19, 2015
Upon your update, and thanks for the details, that situation where things were not spelled out in hyper detail is exactly why you are feeling blindsided by these changes now. Without everything laid out in writing prior to the beginning of construction, the door is left open for all sorts of expensive mistakes or misunderstandings.
It sounds these guys might do nice work, but their professional side is a little loosey goosey. I don't know how you proceed towards a discussion. Privately, you might want to acknowledge you began a pretty large project with a minimum of homework and planning documents, and you might seek to get up to speed on what you need to know before responding to the contractor out of (understandable) frustration.
posted by jbenben at 1:06 PM on January 19, 2015 [1 favorite]
It sounds these guys might do nice work, but their professional side is a little loosey goosey. I don't know how you proceed towards a discussion. Privately, you might want to acknowledge you began a pretty large project with a minimum of homework and planning documents, and you might seek to get up to speed on what you need to know before responding to the contractor out of (understandable) frustration.
posted by jbenben at 1:06 PM on January 19, 2015 [1 favorite]
Still not your architect, but sympathetic to the situation you are in. A script to consider paraphrasing:
"We understand you feel you need to make a claim for more money to finish the project, but hopefully you see that from our perspective we've been accommodating, even to the point of reducing project scope, to keep things on track and affordable. While we aren't experts, it seems to us that the changes you are claiming are entirely for factors that have been outside our control or influence. On top of that, we proceeded with this project on the basis of the original cost, because that's what we can afford. So, we are finding this request very challenging.
We need to understand the whole situation better to make any decision or response. We are open to review and consideration of specific claims, and also want to be sure you are properly crediting the changes we made in order to save money. Please put all of these items in writing, with back-up showing how you developed the costs. We hope that in doing this we can understand exactly where we may have a disagreement and also reinforce that we do appreciate the quality of your work."
Then ask for the same documents I suggested you get in writing above. If the contractor is hesitant to get all his paperwork in order politely explain that you want to maintain a good relationship, but it is clear that this lack of specificity is exactly why you are both in a tough spot together now and this is the best way to get out of it. Do not agree to any work that the contractor says will cost more going forward until he puts things in writing.
Do give the claims an honest shake. Get help reviewing them, whether this or another architect, another builder, a lawyer, etc. It's tough with big budgets like this to take a dispassionate view. Try to reduce the "dispute" to as few specific items as possible. At some point you'll just have to sit down and hash it out. Hopefully this groundwork can help both of you recognize that it the disagreement is about some very specific expenses and history and that doesn't need to sour the whole relationship.
posted by meinvt at 2:18 PM on January 19, 2015 [2 favorites]
"We understand you feel you need to make a claim for more money to finish the project, but hopefully you see that from our perspective we've been accommodating, even to the point of reducing project scope, to keep things on track and affordable. While we aren't experts, it seems to us that the changes you are claiming are entirely for factors that have been outside our control or influence. On top of that, we proceeded with this project on the basis of the original cost, because that's what we can afford. So, we are finding this request very challenging.
We need to understand the whole situation better to make any decision or response. We are open to review and consideration of specific claims, and also want to be sure you are properly crediting the changes we made in order to save money. Please put all of these items in writing, with back-up showing how you developed the costs. We hope that in doing this we can understand exactly where we may have a disagreement and also reinforce that we do appreciate the quality of your work."
Then ask for the same documents I suggested you get in writing above. If the contractor is hesitant to get all his paperwork in order politely explain that you want to maintain a good relationship, but it is clear that this lack of specificity is exactly why you are both in a tough spot together now and this is the best way to get out of it. Do not agree to any work that the contractor says will cost more going forward until he puts things in writing.
Do give the claims an honest shake. Get help reviewing them, whether this or another architect, another builder, a lawyer, etc. It's tough with big budgets like this to take a dispassionate view. Try to reduce the "dispute" to as few specific items as possible. At some point you'll just have to sit down and hash it out. Hopefully this groundwork can help both of you recognize that it the disagreement is about some very specific expenses and history and that doesn't need to sour the whole relationship.
posted by meinvt at 2:18 PM on January 19, 2015 [2 favorites]
actually, just stating that it (triple hung windows or whatever) are in the contract documents, so they will be supplied at no additional cost to the Owner. (DO NOT say "plans", say "Contract Documents". The drawings are a part of the contract.)
Unless the contract is cost-plus and there are no contract documents because they didn't want to employ the architect to produce that much, which is fairly common in residential construction. Holding tight to the "contract documents" in a case where the drawings aren't detailed enough to show EVERYTHING is basically like writing a letter saying "please provide 5 metric fucktons of change orders", which really isn't better than what's happening already.
Hopefully there's a "not to exceed amount" in the current contract?
posted by LionIndex at 4:46 PM on January 19, 2015
Unless the contract is cost-plus and there are no contract documents because they didn't want to employ the architect to produce that much, which is fairly common in residential construction. Holding tight to the "contract documents" in a case where the drawings aren't detailed enough to show EVERYTHING is basically like writing a letter saying "please provide 5 metric fucktons of change orders", which really isn't better than what's happening already.
Hopefully there's a "not to exceed amount" in the current contract?
posted by LionIndex at 4:46 PM on January 19, 2015
They signed a contract based on a set of drawings. The drawings, therefore are the basis for the contract. So charging extra for something that is called out on the drawings is BS.
posted by rudd135 at 5:31 PM on January 19, 2015 [2 favorites]
posted by rudd135 at 5:31 PM on January 19, 2015 [2 favorites]
I've been there (won the lawsuit). Here are a few pragmatic considerations.
- You're right, but what you want is not to be right, but to have a well built house at an affordable price. Consider whether it would be cheaper to pay part of the increase than to play hardball, have them walk away, and have to get someone else to finish the work. If this person underbid the job, nobody else will do it for that low price either. Sure, you're right and might win in court, but would you collect? (Are they licensed, bonded, insured?) What would the lawyers cost?
- When a group starts being shady like this, it's worth increasing your scrutiny on the work being performed, too. Some contractors are good builders and bad at the business end, so all may be fine. Some are just low quality all around.
- Based on where you are with payments, if he walked away, would you have enough remaining in the construction loan to finish the work at market rate? Don't make a payment until you see how this conversation comes out.
- It's better that he's talking to you than just cutting corners you might not notice.
- Had he bid well originally, you would've had to pay that higher cost also, so if the increases are fair (which probably needs a second opinion), then it's not like you lost money.
has taken lots of extra materials and now the price of materials has gone up
So, they already installed these extra materials and now he wants extra pay? If he didn't ask ahead of time, that seems less cool. It might also change the equation about whether it's cheaper for you to make a few concessions or let him storm off and find someone else to go the last mile.
Good luck. This is not fun.
posted by slidell at 9:14 AM on January 20, 2015 [1 favorite]
- You're right, but what you want is not to be right, but to have a well built house at an affordable price. Consider whether it would be cheaper to pay part of the increase than to play hardball, have them walk away, and have to get someone else to finish the work. If this person underbid the job, nobody else will do it for that low price either. Sure, you're right and might win in court, but would you collect? (Are they licensed, bonded, insured?) What would the lawyers cost?
- When a group starts being shady like this, it's worth increasing your scrutiny on the work being performed, too. Some contractors are good builders and bad at the business end, so all may be fine. Some are just low quality all around.
- Based on where you are with payments, if he walked away, would you have enough remaining in the construction loan to finish the work at market rate? Don't make a payment until you see how this conversation comes out.
- It's better that he's talking to you than just cutting corners you might not notice.
- Had he bid well originally, you would've had to pay that higher cost also, so if the increases are fair (which probably needs a second opinion), then it's not like you lost money.
has taken lots of extra materials and now the price of materials has gone up
So, they already installed these extra materials and now he wants extra pay? If he didn't ask ahead of time, that seems less cool. It might also change the equation about whether it's cheaper for you to make a few concessions or let him storm off and find someone else to go the last mile.
Good luck. This is not fun.
posted by slidell at 9:14 AM on January 20, 2015 [1 favorite]
I work in architecture, am almost allowed to call myself one (soon..). Your GC is a mess and is taking advantage of you in a big way, but you put yourself in a bad position by not signing an actual contract (seemingly?), using incomplete drawings and forgoing architectural construction admin services... you are where you are now though, so that's mostly a PSA for the future and others.
The first step is to pull out whatever you signed (was it just the bid spreadsheet or was there more?) and figure out what you and the GC agreed to. Then figure out what they've been charging you for in excess of your bid. Then cross check that list against the drawings you got from your architect. If there are items (like the windows) being charged that are clearly on the plans, that is total BS. If there are items that were NOT clear on the plans, I think you have to eat it. If it's material cost increases, I would say that is absolutely the GC's problem and not yours because he bid it at a particular cost and it's his responsibility to be aware of the potential cost increases on his bid. Even though it doesn't sound like you have a contract to clearly cover the material cost increases, I think that's standard enough you can push for it. So, I would total up and figure out what you've paid out in legitimate changes vs what you've had to pay for things that that contractor should have included in his bid. See where you stand. Since you did engage him to do the work with incomplete drawings, I think some cost overruns are really to be expected as it's a natural consequence of not having enough info up front. I would approach negotiating with him from the position that you have say, 60% legit charges for things that were unclear, but 40% of the charges so far should have been covered by standard practices in bidding.
I think from there you need to sit down with the contractor and figure out what is outstanding, what his timeline is and have him submit change orders for anything else he is aware of that the drawings (and therefore bid) do not cover. And then just push him to get the work done. Unfortunately you're in a fairly poor position since there is really no reason your GC wouldn't just walk away if you get too difficult. Normally in construction a percentage of each payment is withheld in order to prevent this (eg contractor walks and he doesn't get paid for some of the work already completed). I suppose you could take the position that you will only pay out the remainder of the contract on certified occupancy?
Also... you may want to check if your permit for construction is going to expire soon if he is 8 months (!!!) behind schedule..
It also may be possible to hire another architect or another GC as a consultant to help you mange the contractor you already have, on more of an as-needed basis. I would look at small design-build type places that might be OK with a few hours of construction management consulting for you. A CM consultant will have a much better idea of industry norms than you the lay-person do, and will be able to guide your approach. You can search the AIA chapter websites for local architects if that's the path you want to take.
posted by annie o at 9:31 PM on January 21, 2015
The first step is to pull out whatever you signed (was it just the bid spreadsheet or was there more?) and figure out what you and the GC agreed to. Then figure out what they've been charging you for in excess of your bid. Then cross check that list against the drawings you got from your architect. If there are items (like the windows) being charged that are clearly on the plans, that is total BS. If there are items that were NOT clear on the plans, I think you have to eat it. If it's material cost increases, I would say that is absolutely the GC's problem and not yours because he bid it at a particular cost and it's his responsibility to be aware of the potential cost increases on his bid. Even though it doesn't sound like you have a contract to clearly cover the material cost increases, I think that's standard enough you can push for it. So, I would total up and figure out what you've paid out in legitimate changes vs what you've had to pay for things that that contractor should have included in his bid. See where you stand. Since you did engage him to do the work with incomplete drawings, I think some cost overruns are really to be expected as it's a natural consequence of not having enough info up front. I would approach negotiating with him from the position that you have say, 60% legit charges for things that were unclear, but 40% of the charges so far should have been covered by standard practices in bidding.
I think from there you need to sit down with the contractor and figure out what is outstanding, what his timeline is and have him submit change orders for anything else he is aware of that the drawings (and therefore bid) do not cover. And then just push him to get the work done. Unfortunately you're in a fairly poor position since there is really no reason your GC wouldn't just walk away if you get too difficult. Normally in construction a percentage of each payment is withheld in order to prevent this (eg contractor walks and he doesn't get paid for some of the work already completed). I suppose you could take the position that you will only pay out the remainder of the contract on certified occupancy?
Also... you may want to check if your permit for construction is going to expire soon if he is 8 months (!!!) behind schedule..
It also may be possible to hire another architect or another GC as a consultant to help you mange the contractor you already have, on more of an as-needed basis. I would look at small design-build type places that might be OK with a few hours of construction management consulting for you. A CM consultant will have a much better idea of industry norms than you the lay-person do, and will be able to guide your approach. You can search the AIA chapter websites for local architects if that's the path you want to take.
posted by annie o at 9:31 PM on January 21, 2015
I'm also not-quite-an-architect, and my job involves a lot of disputes with contractors. What is and isn't reasonable for them to charge you extra for is almost entirely dependent on the specific contract you signed and the language used in it. A bid and an estimate are not the same thing, and each form of pricing a job also comes in many variations.
Most of the work I handle now uses a very firm lump sum bid process that requires extremely detailed drawings and specifications, and anything not shown in the drawings is an extra charge. But everything, absolutely everything within them is included, regardless of mistakes the contractor made bidding or labor or material cost increases.
Other work I deal with is first estimated by the contractor, so we know how much money to set aside to start with, and then charged to us on what's often called "time and materials" - in other words, they charge by the hours actually worked and actual cost of materials. For us this has to be exhaustively documented with receipts and payroll records, but it can be much more informal. The contractor has to tell us if costs are rising above the estimate, but we still pay the extra amount. This can more flexibly allow changes to the work along the way to reduce costs, though, which if you trust your contractor can be a benefit. It also allows for much less detailed drawings.
There are plenty of variations on these - as one example, you can arrange to pay time-and-materials up to a pre-set "not to exceed" price, which is usually some percentage higher than the estimate.
Although you've called it a bid, it sounds more like you have a estimate + time-and-materials arrangement. Which unfortunately is going to make it much more of a negotiation. Meinvt and annie o have great suggestions for what to do from here, I don't really have anything to add. Good luck, I know this stuff is stressful, especially when it's your own money.
posted by sepviva at 5:45 PM on January 24, 2015
Most of the work I handle now uses a very firm lump sum bid process that requires extremely detailed drawings and specifications, and anything not shown in the drawings is an extra charge. But everything, absolutely everything within them is included, regardless of mistakes the contractor made bidding or labor or material cost increases.
Other work I deal with is first estimated by the contractor, so we know how much money to set aside to start with, and then charged to us on what's often called "time and materials" - in other words, they charge by the hours actually worked and actual cost of materials. For us this has to be exhaustively documented with receipts and payroll records, but it can be much more informal. The contractor has to tell us if costs are rising above the estimate, but we still pay the extra amount. This can more flexibly allow changes to the work along the way to reduce costs, though, which if you trust your contractor can be a benefit. It also allows for much less detailed drawings.
There are plenty of variations on these - as one example, you can arrange to pay time-and-materials up to a pre-set "not to exceed" price, which is usually some percentage higher than the estimate.
Although you've called it a bid, it sounds more like you have a estimate + time-and-materials arrangement. Which unfortunately is going to make it much more of a negotiation. Meinvt and annie o have great suggestions for what to do from here, I don't really have anything to add. Good luck, I know this stuff is stressful, especially when it's your own money.
posted by sepviva at 5:45 PM on January 24, 2015
This thread is closed to new comments.
It sounds like you didn't retain the Architect for construction administration.. we're generally pretty good at this. This is who should be fighting this battle, not you.
You've already let the camel get its nose in the tent by paying for the windows and making concessions. If you don't continue to fold like a cheap lawnchair to his demands, it will piss him off.
No, you should not be paying for his errors in bidding, and what evidence do you have that he actually made any errors in bidding? Do you have a bid form listing prices for each element, i.e., windows, doors, roof etc. and a price for each item? Or did he just tell you "I didn't bid it that way". I've heard that a hundred times if once, and my reply is along the lines of "Well, it must suck to be you then. " actually, just stating that it (triple hung windows or whatever) are in the contract documents, so they will be supplied at no additional cost to the Owner. (DO NOT say "plans", say "Contract Documents". The drawings are a part of the contract.)
He should be paying you for the delay. If you have a written contract - hopefully an AIA document, look for the term "liquidated damages".
He was supposed to have it finished by a certain date, he hasn't, therefore he is not in compliance with the contract. LD's establish a dollar per day figure.
Be real sure whatever work he has in place conforms to code - i.e., has it been inspected by the city/county/etc at a minimum, and better by a construction professional like - an architect, or an independent home inspector.
If all is kosher, it might be a good time to review the "Termination for cause" clause in the contract.
Did your Architect pass any judgement on this contractor before you retained him?
posted by rudd135 at 10:11 AM on January 19, 2015 [8 favorites]