GC contract error- misquoted 22k!
Hi all- we have an unusual situation, and our architect has not experienced it so I thought I would ask here.
Our GC just informed us he made an error on the bid form, and the total bid, which was our contract amount, was short 22k. He prepared the bid in Excel and missed one cell. We probably would not have gone with this contractor had this been the total bid amount. He wants us to now pay him for this increased contract amount, not the amount we signed a contract for.
I do not want to short change him, and we have had a good relationship so far, but this is a significant error, and we are really upset. If we just pay this difference it will eat the rest of our contingency, and we could end up over budget and really stretched. Agh! What do we do?
Has anyone dealt with this? We are 5 weeks into a 25 week construction.
Thank you!
Alicia
casadelsol16
in General Discussion 3 years and 2 months ago
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17 replies
andriywww1990 | 3 years and 1 month ago
what chris is saying is the proper way to do business. i run my business that way as well.
with the small jobs i do, if i overlook something, i pay for it – but it is going to be something very small – not the labor of 3 people and 5k worth of materials.
what others reading this may not realize is, some service firms have multiple jobs running at one time and that means multiple revenue streams. multiple crews working and the owner or a supervisor can move between those jobs making sure the crews have what they need and are meeting schedule and if that company is lucky they have an office staff. a firm like that can “rob peter to pay paul”. Most GC’s don’t operate that way.
For a homeowner dealing with a GC, the bottom line is: does a homeowner expect that GC to be on the job everyday leading up to the end of the job or do they mind if the GC takes off to run two jobs to make up money they might need to keep operating. and if the GC usually runs two jobs, do they mind the GC spreading themselves thinner by starting a 3rd sooner than they should? In a competitive environment, it is not whether the GC will do the right things as Chris points out, it is does the GC have the choice to do the right thing.
OP sounds like they want peace and sanity in their home life and they already chose accordingly.
workisfun | 3 years and 1 month ago
Maybe consider a longer payment plan for the $22k.
lkrshacmzcy | 3 years and 1 month ago
Just had a situation where we performed work but never actually had it on our proposal and therefore never actually got approval.
Sucks, but we covered the cost. It is part of doing business.
…We handle the issue internally with who missed it and it ensures they do not miss it again.
lkrshacmzcy | 3 years and 1 month ago
Just had a situation where we performed work but never actually had it on our proposal and therefore never actually got approval.
Sucks, but we covered the cost. It is part of doing business.
…We handle the issue internally with who missed it and it ensures they do not miss it again.
andriywww1990 | 3 years and 1 month ago
we all run into good customers who would check a quote over and make sure everything is accounted for but that is putting too much on most customers. some may not know what they are looking at, especially in long detailed quotes. they will not know what is missing, is what i mean. adding numbers ok, maybe, but that is only the smallest of problems in estimates and quotes – keep in mind some people deliberately underbid to get jobs. most customers, when they are looking quotes over are looking at it with an eye to protect themselves; most people cannot imagine what can go wrong with a contractor who misquotes something (its been written about on here a lot) and most don’t think about it until there is an issue and someone can’t finish a job.
most customers would be wise to do what the professionals do: treat the lowest bids as suspect; it will get rid of 99% of the problems. If you are compelled to go with the lowest bid, give it a lot of scrutiny and ask a lot of questions to understand what makes that contractor think he can get through that job (what is he leaving for him self over six months after materials and insurance and labor? will he be able to feed himself and his family or will he have to take another job to do that and leave you stranded while he is working someplace else?) and do what lcrilovotorino suggests; check the numbers. no contractor is that smart and talented that they can get through anything any better than anyone with perhaps more experience if they make a mistake in the quote. but so long as they did not make the mistake of being the bottom bidder or even near the bottom, it is likely that they can get through it without going back with their hands out. a real pro (a real pro at selecting contractors and a real pro at being a contractor) would be embarrassed to get caught in this situation and would do everything to avoid it.
all of what happen to op rests on the contractor’s shoulders. the contractor should know how to use excel and should have tallied the numbers. the only reason i explained what would happen if the op did not resolve that with the contractor is because of what the OP would suffer later; chaos in their own family life.
lcrivolitorino | 3 years and 1 month ago
Hi I would like to add my two cents in here after reading this, it seems as what Randolph said that if it was an item already accounted for on the spreadsheet but not tallied up at the end it would show me that the guy is not trying to get over and as well we do expect customers to read everything and add them up as well. It does say to me for doing this about 33 years that people only look at the final number and really don’t read the whole contractor. It is necessary that one examines the entirety and recalculate all the numbers, because as some of us who do contracts at 1:00 am it is possible to tally wrong even though you got all the numbers on the pages. Thanks
stevecym | 3 years and 2 months ago
I was thinking what slimc said but if this is a small job and he did not leave himself a lot, he will have to take in more work to finish it and then everyone suffers. If this was one of the highest bidders on a bigger job, that might work ok.
slimc | 3 years and 2 months ago
I’d split the difference.
andriywww1990 | 3 years and 2 months ago
i suspect this was a lower bid. keep in mind that someone writing a lower bid may already have trouble getting through the job. if the bid is too low, 22k on a 100k job, would be a lot of money and would have put that person in trouble (they would be applying for food stamps in his house and praying the van does not break down). 22k on something costing 60k and there is no way they can finish. 22k on an honestly bid 300k job and they will get through it but will have to watch things and might take a couple of short cuts and that retirement savings is not going to happen at that time.
this one sounded like an honest mistake. but homeowners need to be aware that there are contractors out there who habitually write low quotes to get jobs and then they have to go back to the homeowner with their hand out half way through the job. it is their modus operandi. this behavior only flies in NYC. in a small town, word would get around and no one would hire them.
when i worked in buildings selecting bids for projects and had to run the bids by a supervisor, they ne ver took the lowest bid. it was automatically suspect. the professional managers knew that some people write bids too low and they also knew that if most of the bids were around a certain number, those were the “safe” bids. when something goes wrong with a low bid, it becomes everybody’s problem, not just the contractors. finger pointing will not help as the plane runs out of fuel and crashes.
Guest User | 3 years and 2 months ago
That the line items were all priced correctly in the contract, but added wrong is much more reassuring than what I initially garnered from the OP, which was that a line item was not in the signed contract
casadelsol16 | 3 years and 2 months ago
Yes, randolph, that is exactly what happened.
randolph | 3 years and 2 months ago
is the missing 22k just a math error in the spreadsheet, all of the line items were correctly priced but the total was calculated incorrectly?
Guest User | 3 years and 2 months ago
I have never had a comfortable or quality experience when I persuaded a contractor to take a job for less pay or time than the contractor thought they could deliver on. The headache of switching to a new GC now may be better than the headaches on weeks 26 and onward with this GC who already made a $22k mistake. This might be a good opportunity to go back to your other GCs to further negotiate by telling them you are “thinking” about switching GCs because the existing GC under bid himself too much. “Can you do any better on your previous best price to persuade me to make a GC switch mid project?”
Guest User | 3 years and 2 months ago
I’m a heating contractor and I have never revised a quote upward once a contract was signed… sadly at this point he has you by the short hairs. Hopefully this all has a happy ending, and he won’t come back again and again with reasons to increase the costs
casadelsol16 | 3 years and 2 months ago
Thank you @stevecym , this is really helpful. I do not want out project to go south, and I think it was an honest mistake.
stevecym | 3 years and 2 months ago
I will give you the long form version of what randolph said:
If you are lucky, this individual works on enough margin that the 22k is what he saves in his ira and kids college savings plan and he can forgo that money for a few months. In this case it might be nice if he accepts responsibility outright. But something tells me he is not able to save that much toward these things on every job. Maybe he made some on the last job, maybe he did not.
If he cannot forgo the money or already bid this job too low, he may have to take a second or third job in to complete this one. If he does that your job suffers in quality and timing.
If he has made this mistake elsewhere, with someone else recently, or his own personal finances are already shakey, things could go south.
Keep in mind when dealing with contractors and every contractor has been there one time or another: its not just the money they need to buy the materials and the labor for your job. Its everything else in the contractor’s household and his business as well: mortgage, auto loans, childcare, insuran ce (his own auto, homeowners, medical, plus the business liabilty and workers comp), fuel….. take any one of those away and this persons life will get hard and their on job performance will suffer.
I would not assume that because there were other lower bids that they were accurate or that they had enough margin themselves or that they had not found someway around a legitimate expense that this person may not know about or be willing to take a risk on.
I am not making excuses for this person. I am pointing out the reality of a contractor’s life. It sucks, but their problems become yours (and vis versa).
If i made a mistake like this my wife would make me pack it in and get a 9-5.
randolph | 3 years and 2 months ago
“We are 5 weeks into a 25 week construction.”
guess what is going to happen if you don’t pay him the 22k???