RE: Round #4263 with the Client From Hell

["Dan Hall" <dhall -at- san-carlos -dot- rms -dot- slb -dot- com>]

I don't know how this would play out in Tech Writing,
but my father works for a contractor who contracts
electrical for huge houses in the Beverly Hills
area (40,000+ sq. ft.) These things are like hotels.

Most of the profit on these jobs actually comes from
change orders. When the plan calls for an outlet in
a certain location and the house is 3/4 built, with
the walls closed up, moving the outlet to a new
location involves a major amount of work, and they
charge accordingly. If the changes are caught early
enough in the construction, they are billed as changes,
but usually cost not much more than the original
estimate. Some number of (minor) changes are "free",
and then they charge time and materials on the rest.

Contractors: I'm curious as to how "formalized" your
process for charging for changes is. Do you tell the
client up-front how you will negotiate changes in
scope?

Dan

It is the mark of an educated mind to rest satisfied
with the degree of precision which the nature of the
subject admits and not to seek exactness where only
an approximation is possible. - Aristotle

-----Original Message-----
From: bounce-techwr-l-72045 -at- lists -dot- raycomm -dot- com
[mailto:bounce-techwr-l-72045 -at- lists -dot- raycomm -dot- com]On Behalf Of Michael
Simoni
Sent: Tuesday, January 08, 2002 1:26 PM
To: TECHWR-L
Subject: RE: Round #4263 with the Client From Hell


With several related threads going on about the CFH and business practices,
curiosity has gotten the best of me. I see parallels between the current
topic and some of what I had to write about at my previous job, a
construction software company. Two options have been presented - suck it up
and do the additional work at no additional cost, or attempt to renegotiate
the contract.

Has anyone used or attempted to use change orders to amend contracts? Has it
been successful?

Most construction contracts, with few exceptions, are a flat-fee with an
extremely slim margin for profit. In construction, there are constant
changes due delays/unavailability of materials and subcontractors, and
changes to the project plans. Subsequently this affects the contract price.
In the contract, there is usually a section about changes to the project
scope, where, once the contract is signed, any changes require a Change
Order and client approval.

The Change Order amends the contracted price. It outlines the changes to the
initial plans and additional (or reduced) materials and labor charges for
the work. Without client sign off, the work is not performed. At that point
it's the client's choice.

Similarly, change orders can be issued for work performed at no charge. (And
the work that construction contractors perform for free is often the biggest
reasons why their businesses go under-no grasp of the true costs to the
business). The change order still details the material and labor charges,
but it's marked as no charge and is supplied to the client. The paperwork
helps send the client the message they're getting something for nothing. And
contractors are able to track costs for materials and labor they're giving
away.


Michael Simoni
Technical Writer
www.compumotor.com





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