ᐅ General contractor’s estimate vs. final invoice – a nightmare
Created on: 8 Dec 2021 21:41
W
Wurzelxquadrat
Hi everyone,
I’d like to ask for your advice because my general contractor (GC) is really testing my patience—and my budget 🙂
After the price lock period ended, the GC submitted a change order with significant, partly understandable, cost increases.
OK, under pressure, we agreed to a 15% extra cost.
Then, shortly before the start of the excavation work, we were informed that additional excavation was necessary based on the soil survey report.
OK, the wound was still fresh, so we agreed to an additional 14,000 € (about 15,500 USD).
And now we have the problem:
The offer is basically structured as follows:
Item 1) 100 m³ (130 cubic yards) of foundation cushion fill with MG FS 0/45 as a base for the construction of the terrace, at a price of €59.60 (about $65) per m³ = €5,960 (about $6,500)
Item 2) 50 m³ (65 cubic yards) of foundation cushion fill with MG FS 0/45 as a base for the construction of the driveway, at a price of €59.60 (about $65) per m³ = €2,980 (about $3,250)
and so on, each with the note: Billing based on weighbridge tickets at 2t/m³ (2 tons per cubic meter)
However, in the invoice, he charges:
Item 1) 115 m³ (150 cubic yards) × €59.60
Item 2) 60 m³ (78 cubic yards) × €59.60
and refers to the fact that more material was delivered, which is also reflected in the weighbridge tickets.
So, he ultimately dug deeper and wider, used more material, and charges me accordingly.
Since this way of making money rubs me the wrong way, I have of course disputed the invoice.
In my opinion, it is the GC’s responsibility to perform a proper measurement and then submit an offer accordingly.
Alternatively, he could provide a quote for supplying the frost protection layer on a “per ton” basis.
Of course, the note is included, but to me, there are too many variables in this offer.
Basically, he can now calculate whatever he likes, no matter how much he actually installs.
What is your opinion on this case?
Am I mistaken here? Do I have to accept this?
Thanks in advance for your feedback.
Best regards,
x
I’d like to ask for your advice because my general contractor (GC) is really testing my patience—and my budget 🙂
After the price lock period ended, the GC submitted a change order with significant, partly understandable, cost increases.
OK, under pressure, we agreed to a 15% extra cost.
Then, shortly before the start of the excavation work, we were informed that additional excavation was necessary based on the soil survey report.
OK, the wound was still fresh, so we agreed to an additional 14,000 € (about 15,500 USD).
And now we have the problem:
The offer is basically structured as follows:
Item 1) 100 m³ (130 cubic yards) of foundation cushion fill with MG FS 0/45 as a base for the construction of the terrace, at a price of €59.60 (about $65) per m³ = €5,960 (about $6,500)
Item 2) 50 m³ (65 cubic yards) of foundation cushion fill with MG FS 0/45 as a base for the construction of the driveway, at a price of €59.60 (about $65) per m³ = €2,980 (about $3,250)
and so on, each with the note: Billing based on weighbridge tickets at 2t/m³ (2 tons per cubic meter)
However, in the invoice, he charges:
Item 1) 115 m³ (150 cubic yards) × €59.60
Item 2) 60 m³ (78 cubic yards) × €59.60
and refers to the fact that more material was delivered, which is also reflected in the weighbridge tickets.
So, he ultimately dug deeper and wider, used more material, and charges me accordingly.
Since this way of making money rubs me the wrong way, I have of course disputed the invoice.
In my opinion, it is the GC’s responsibility to perform a proper measurement and then submit an offer accordingly.
Alternatively, he could provide a quote for supplying the frost protection layer on a “per ton” basis.
Of course, the note is included, but to me, there are too many variables in this offer.
Basically, he can now calculate whatever he likes, no matter how much he actually installs.
What is your opinion on this case?
Am I mistaken here? Do I have to accept this?
Thanks in advance for your feedback.
Best regards,
x
Wurzelxquadrat schrieb:
Hello,
Here is some additional information:
Price Fixation: Our construction contract included a price fixation for 12 months, provided that the building permit / planning permission was obtained within those 12 months. Unfortunately, we were unable to meet this condition. We have accepted this situation.
Based on the soil survey, additional foundation work was required.
Of course, this is not the contractor’s fault, so we accepted it.
The general contractor (GC) provided a corresponding offer as described above, and we placed the order.
To my understanding, however, he is responsible only for the quantities specified in the offer based on the survey.
If more materials are used later simply because they continue to dig deeper and wider, I don’t understand why I should have to pay for that.
This is not a cost estimate, but an offer, right?!
Regards,
x You already miscalculated from the start. Normally, you sign a planning contract (if you don’t know the exact timing of the building permit / planning permission) and only sign the main contract once the permit is granted. Because you are likely facing not only the 15% additional costs and supplementary financing but also the interest on the capital tied up. The small amount the GC is asking for now probably doesn’t make much difference and wouldn’t bother you if those previous mistakes hadn’t happened.
O
Osnabruecker9 Dec 2021 11:01Quite a lot of gravel...
Depending on the region, the price for the installed gravel is reasonable.
The problem, however, is that the offer contains unfavorable conditions for you. Usually, gravel has a density of about 1.7–1.8.
This means that the general contractor (GC) profits from every cubic meter installed right from the start. Unfortunately, you signed this agreement.
The survey probably only includes 2–3 boreholes = samples.
You can only see the actual impact on the site after excavation.
Depending on the region, the price for the installed gravel is reasonable.
The problem, however, is that the offer contains unfavorable conditions for you. Usually, gravel has a density of about 1.7–1.8.
This means that the general contractor (GC) profits from every cubic meter installed right from the start. Unfortunately, you signed this agreement.
Wurzelxquadrat schrieb:
As I understand it, he is responsible only for the quantities determined in the offer based on the survey report.
If more is used later because they keep digging deeper and wider, I don’t understand why I should have to pay for that.
The survey probably only includes 2–3 boreholes = samples.
You can only see the actual impact on the site after excavation.
H
hampshire9 Dec 2021 11:08Wurzelxquadrat schrieb:
What is your opinion on this case?
Am I mistaken here? Do I have to accept this? In terms of content, I agree with the assessment of @11ant.
Saying that you are mistaken seems too harsh to me. I would drop the accusation that the contractor is "printing money." I think you may not have fully understood the impact of the variability of the unit prices in the offer. Ultimately, you probably have to accept it. In my opinion, the deviation of about 15% upwards is within an acceptable range. Whether the arrangements could have been handled better, I cannot judge.
karl.jonas schrieb:
The note "billing according to weight tickets" is not an obvious indication of possible additional costs for a layperson. It could also mean that the contractor is proving the delivered quantity according to the weight tickets for the offered and contracted amount. If something in the contract is unclear or not precisely understandable, you can ask questions. This is a reasonable expectation for a consumer. It can happen that you don’t read something carefully; once you sign, you take responsibility for that. I do not see any indication of misleading here.
karl.jonas schrieb:
Regardless of the reasons, an experienced contractor should present their offer clearly enough so that no customer is surprised by the costs afterward. The following lines are explicitly not related to the specific situation of @Wurzelxquadrat:
With more complex offers, the consumer does bear some responsibility to ensure they understand the offer. Therefore, it is advisable to review the items and ask questions—for example: How large can the deviations be? How do you arrive at the stated quantity? What does this mean for possible deviations in the final amount? What kind of communication can we agree on if you find there is a deviation?
At some point, the balance between freedom to act and personal responsibility gets out of sync. Being mature does not come with a full coverage insurance policy.
Something similar happened to me, but my unit price was much lower and the discrepancy was probably less significant.
Interestingly, the weighing tickets did not match the billed quantity at all; according to those, I would have had to pay even more. However, the billed quantity could be explained: after filling the "replacement pit," it was found that the subgrade was 20cm (8 inches) lower than the height specified in the building permit / planning permission. This meant that more material had to be added to raise the subgrade level to that of the surrounding terrain.
After the demolition, the entire site was lower than indicated by the survey.
In hindsight, more careful attention could have been given to the cost estimate, but I wasn’t able to avoid the additional costs anyway.
Why don’t you just ask your main contractor (GU) straightforwardly why they suddenly needed so much more?
Interestingly, the weighing tickets did not match the billed quantity at all; according to those, I would have had to pay even more. However, the billed quantity could be explained: after filling the "replacement pit," it was found that the subgrade was 20cm (8 inches) lower than the height specified in the building permit / planning permission. This meant that more material had to be added to raise the subgrade level to that of the surrounding terrain.
After the demolition, the entire site was lower than indicated by the survey.
In hindsight, more careful attention could have been given to the cost estimate, but I wasn’t able to avoid the additional costs anyway.
Why don’t you just ask your main contractor (GU) straightforwardly why they suddenly needed so much more?
Osnabruecker schrieb:
That's quite a lot of gravel...
Depending on the region, the price for the installed gravel is reasonable.
The problem is that the offer includes unfavorable terms for you. Gravel usually has a density of about 1.7–1.8.
That means the general contractor (GC) is effectively making a profit on every installed cubic meter. But the GC charges by the cubic meter, not by the ton.
That would be a positive for the client.
As @karl.jonas correctly suspected, he sees the situation differently from me precisely because he (like the OP) did not fully understand it. @hampshire has already explained who had the duty to inquire carefully. With
the contractor pointed out that he assumes a density of two tons per cubic meter for the required material and that the invoicing is based on the measured weight.
This is not only not an obvious indication of extra costs, it is not an indication of extra costs at all.
Yes, you did.
What happened? Quite simply:
1) The OP asked the contractor for a quote. This was prepared based on the volumes calculated from the plans. At that time, the contractor assumed he would need to unload 300 tons of material from the silo onto the dump truck to achieve 150 cubic meters (150m³) on site after installation.
2) The ground engineer then recommended excavating deeper and installing more material. THIS is where the additional costs occurred — nowhere else. The contractor’s price on the invoice exactly matches the amount quoted. The contractor therefore had to deliver not 300 but 350 tons (350t). Each time, he drove to the gravel pit with an empty truck. The truck is weighed on entry and exit. This does not happen on any unofficial scale — every year an official inspector from the calibration authority comes to check the accuracy of the scale. The weighbridge tickets are basically like electronic receipts, similar to those for vehicle emissions tests, showing the last calibration number. Everything is clean, transparent, and verifiable.
3) You can’t load 350 tons in a single truckload. The construction workers on site would have measured after each delivery and layer compaction that the driver should only partially fill the truck on the eighteenth load.
Contractors cannot be blamed if real-life onsite work is more complex than the client’s childhood memories of playing in the sandbox. Therefore, I must strongly disagree with @karl.jonas that the contractor is not recommendable.
There are very good reasons why I tirelessly advise against amateurs or bold beginners handling the entire tendering process alone. Building a whole house is many times more complex than simply commissioning someone to paint all the ceilings (or wherever the average consumer thinks they have enough similar experience). You don’t learn the difference in a weekend webinar (although I might consider offering one next summer, it seems). Jumping to the conclusion that surprisingly higher costs always mean the contractor is dishonest is clearly "not a solution" either ;-)
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Wurzelxquadrat schrieb:
each time with the note: Billing based on weighbridge tickets 2t/m³ (2 tons/m³)
the contractor pointed out that he assumes a density of two tons per cubic meter for the required material and that the invoicing is based on the measured weight.
karl.jonas schrieb:
The note "Billing based on weighbridge tickets" is not an obvious indication of possible extra costs for a layperson. It could also mean that the contractor proves by the weighbridge tickets that he delivered the offered and contracted quantity.
This is not only not an obvious indication of extra costs, it is not an indication of extra costs at all.
karl.jonas schrieb:
I don’t understand what "volume shrinkage" is supposed to have occurred here. The OP writes that excavations were dug too deep (or did I misunderstand that?)
Yes, you did.
karl.jonas schrieb:
Regardless of the causes, an experienced contractor should write the offer clearly enough so that no customer is later surprised by the costs. For example, by clearly stating that costs may increase by xy % due to "volume shrinkage" or whatever. Usually, the customer experiences this for the first time, while the contractor has encountered it many times.
What happened? Quite simply:
1) The OP asked the contractor for a quote. This was prepared based on the volumes calculated from the plans. At that time, the contractor assumed he would need to unload 300 tons of material from the silo onto the dump truck to achieve 150 cubic meters (150m³) on site after installation.
2) The ground engineer then recommended excavating deeper and installing more material. THIS is where the additional costs occurred — nowhere else. The contractor’s price on the invoice exactly matches the amount quoted. The contractor therefore had to deliver not 300 but 350 tons (350t). Each time, he drove to the gravel pit with an empty truck. The truck is weighed on entry and exit. This does not happen on any unofficial scale — every year an official inspector from the calibration authority comes to check the accuracy of the scale. The weighbridge tickets are basically like electronic receipts, similar to those for vehicle emissions tests, showing the last calibration number. Everything is clean, transparent, and verifiable.
3) You can’t load 350 tons in a single truckload. The construction workers on site would have measured after each delivery and layer compaction that the driver should only partially fill the truck on the eighteenth load.
Contractors cannot be blamed if real-life onsite work is more complex than the client’s childhood memories of playing in the sandbox. Therefore, I must strongly disagree with @karl.jonas that the contractor is not recommendable.
There are very good reasons why I tirelessly advise against amateurs or bold beginners handling the entire tendering process alone. Building a whole house is many times more complex than simply commissioning someone to paint all the ceilings (or wherever the average consumer thinks they have enough similar experience). You don’t learn the difference in a weekend webinar (although I might consider offering one next summer, it seems). Jumping to the conclusion that surprisingly higher costs always mean the contractor is dishonest is clearly "not a solution" either ;-)
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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