hello- I am a longtime lurker.
I am a 28 yr old GC from upstate ny. My company is young, but I have payrolled employees, and workmans comp etc.
I have gotten in over my head on a $300k plus project. I need advice.
The job started as the remodeling of a small bathroom, and quickly turned into a 2000 sqf addition with complete rework of the rest of the building. Re-roof, side, replace totally rotten osb (partially). Install footer drains (the original builder 12 yrs ago left them out). New septic system.
The original house had a loft bedroom, 1.5 baths, concrete floors and radiant heat, with open floor plan, soft rotten pine siding, and a funky shed roof that was rusted and ready to quit.
Now it is a 3 bedroom, 1 study, with specially designed media room, with radiant heat throughout, and radiant heat in the upstairs bathrooms, two car garage, fiber cement siding, 45 yr shingles, vaulted ceilings with angled can lights everywhere.
The house is co-owned by a father and son (the son is the occupant and the father lives downstate). I was hired by the son, and have been working with him all along. t+m, no contract, scope crawl as almost never seen before, indecision along the way.
They have only ever said good things about our work, we have stuck to verbally agreed upon schedules, they have paid for their changes all along. What I never did, and I now know this was a mistake, was give them a new total number for the final target. As we have gone along, the homeowner has asked me for a final number, and then added work to the scope. Prior to this job, I did not have a formal change order system. We are now very far above my original estimate (for the addition et al), and the father has gotten involved. I gave them my final estimate for completion of the work. They picked it apart, and had Dad’s GC pick it apart. They came back and said, “this is too high”, give us a break, or you are off the job. I took $5/hr per man off our rate, and came back to work. I agreed to come up with another final estimate. I am afraid that when I come back with the new final estimate, that they will try for another reduction in price. I am now charging barely enough to cover my costs. Another reduction is not an option.
We are about 3 wks out from handing them the keys. We will leave and come back when the weather lets up to finish the outside work.
There is an exterior to stain, a deck to build, and some porch roofs to trim out in the spring.
I am trying to finish what I started, and to continue to do a good job. I am not sure how to proceed, and could use a sounding board.
thanks breaktime.
aaron
Replies
Bump.
I think you hold the record for long time luker and the number of posts you have made!!! Where the heck have you been? Working?<g>
One of the smart guys will be along shortly....hang on.
Welcome back!
Ouch.
Aaron, what's in writing and signed by all parties at this time? If they have been paying for the change orders as they come... all that should be left to pay on is the original number, no? I'm thinking there's some information missing or maybe I'm missing something.
I think you may have already made a mistake by agreeing to drop your price. If you are just covering your costs, you really couldn't afford to drop that number and still turn a profit. I would start by explaining to your client just what you've explained to us. They agreed to the changes which are being charged at the same rates as the original contract price they agreed on. They made the changes, not you. You've told us that another price reduction is not an option.... you need to tell your client that.
If you feel you are being fair and honest, stick to your guns and don't let them hammer you down. If they are out to screw you... the probably will... don't help them do it.
You already know that you're behind the 8 ball for not having anything in writing, so I won't hammer that one down your throat. Tuition payments.
EDIT: How much money are we talking about in change orders? How much money is left on the table when compared to the three weeks of work left... is it a wash or are they holding back a large amount?
Edited 2/27/2005 11:10 pm ET by dieselpig
whoa ! stop !
what do you have in writing ?
what kind of written demands have thye made..?
are they whipsawing you? who writes the checks ?
who is expanding the scope ?
who is DOING THE DESIGN WORK ?
c'mon back....
thanks for the responses!!!!
>what do you have in writing ?nothing. except an unsigned estimate>what kind of written demands have thye made..?plenty, and I have answered and satisfied at every turn.>whipsawing you? who writes the checks ? who is expanding the scope ?not sure what whipsawing means. the son cuts checks, and adds work.who is DOING THE DESIGN WORK ?they had me locate and hire an archy to do the addition.thanks again.aaron
Please, give us the details of your T charges, and your M charges.
In other words, do your labor billings use fully-burdened manhour rates? Go back to Professor Smith's post and see what all needs to be included in those rates.
Rates like $65 for master carpenter (you) and $45 for journeyman are probably not even high enough.
At absolute bare minimum, you should be getting a 15 percent markup on plain vanilla materials, the stuff that is in stock at suppliers, that they will take back. It goes up real high on the special order stuff. And special order stuff means anything you cannot take back and get full credit for.
With nothing signed, you need to consider dragging up all the tools, and walking off.
This bait and switch ( father/son) is a game for a lot of HOs. On a T&M job an estimate is only an estimate. Call their bluff if they are paid up to date. Even if not, you aren't more than two weeks out right?
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
do you know how to compute labor burden ?
have you included WC, GL, TRUCKS, BENEFITS, PAYROLL TAXES (state & federal )
ie: what percentage do you have to mark up your rate to cover the cost of a guy showing up to work ?
what is your t&m . do you mark up labor, materials , subs & equipment ?
what was your rate before you made the concession ?
is this t&m ... ? or cost plus ? or cost plus fixed fee ?
what is this sh*t about final target (price) ?
is this t&m or t&m with a guaranteed max ?..
how many lawyers are involved / do you have a lawyer ?
how much money have you collected so far ?
and what happens if you stop work now ?
Geezus Mike.... you're making me nervous! :)
Acting like a proffesor the day before final exam isn't he?
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
c'mon , guys.. if he can answer those.. he can hold his own..
if he can't ... bet he will the next time..
T&M.. how can you lose ?
hah,hah, hah... i hate t&mMike Smith Rhode Island : Design / Build / Repair / Restore
I once worked for a guy that lost money on a T&M. I knew it was going to happen, then it did. It took less than a year and that contractor was bankrupted by another builder.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
>do you know how to compute labor burden ?not really.>have you included WC, GL, TRUCKS, BENEFITS, PAYROLL TAXES (state & federal )no to trucks, or benefits, but I THINK yes to the other things>what is your t&m . do you mark up labor, materials , subs & equipment ?I mark-up subs, and have been charging most of the materials to custuomers account at local yard. the stuff I buy saw no mark-up.>what was your rate before you made the concession ?split rate $35 and $25 carpenters and helpers>what is this sh*t about final target (price) ?that is my original estimate number>how many lawyers are involved / do you have a lawyer ?none yet, and yes, I do.>how much money have you collected so far ?$260k give or take> and what happens if you stop work now ?I live in a fairly small town, and would hate to walk away from a project like this, I feel like it would ruin the name of my company.
Also I hate not finishing.thanks again
Where are you in upstate NY?
Sounds to me like quite a bit of the remodeling work done around here.
Weekly cash payout for labor. Guys quote rates of maybe $35 tops. Owner is paying directly for all materials. No agreement of any kind save verbal, maybe some kind of "estimate" got written.
"Contractor" is just selling his own and his crew's labor, at way below market rates.
What does this owner want the contractor to do at this point? Finish the job and work for free to do it?
Gene-my payouts have not been in cash. my business is legitimate. young, but legitimate. I have spent the afternoon trying to understand my labor burden as per the professors instructions, and have come to understand that the price reduction offered to the client does indeed bring me below the amount I need to charge to cover my labor burden alone, let alone truck ins. etc.this gets better by the minute. Trying to keep my head up and to figure out what do to next.
aaron... my labor burden used to be 50%.. when i added partial paid health insurance, it went up to 62%
in other words.. if i'm paying a guy $10... it used to cost me $15..
now it costs me $16.20.... add overhead & profit and it gets to $25.. that's what i carry when i'm bidding a fixed price job...
when i work by the hour we charge $50..... and $45 if the customer is deserving and conditions warrantMike Smith Rhode Island : Design / Build / Repair / Restore
Sorry to imply that you were working for under-the-table unreportable income.
What I meant about the "around here" remodeling work, is that there are plenty of guys that are doing work for homeowners, and making wages only. Sometimes good wages, sometimes even great wages, also, but wages they are.
They are room additions, new garages, basement remodels, new kitchen wings, sometimes even huge boom-outs like your job. But in all these cases, the homeowners are getting quite a deal, because they are not paying markups on any materials.
Your clients need to understand this, that their job is costing them far less than if a general contractor had done it. A GC would be making margins like I mentioned on materials, his overhead rate charged would be higher, his margins on subs likely higher, and he would want to make his legitimate profit.
The fact that this job grew from whatever small starter package it was, to the full-blown thing it is now, had nothing to do at all with you. It had everything to do with the wants, desires, egos, greed, status-seeking, keeping up the Joneses, whatever was on the minds of the decision makers adding all the goodies and boosting up the package size.
It's probably a case of the son wanting to add all this cool stuff into the work, the media room, etc., etc., and dad never taking stock of what it all might cost.
It smells to me like a fight over money between them, but they are taking it out on you.
How current are you with the billings? In other words, how much are you owed?
no problem Gene, I am just a mite touchy right now.you are fairly right on though, the son made the additions.at this moment I am actually owed $12000.this is last weeks invoice.it includes our plumbing and heating finish, and some materials.
OK, then here are some more thoughts.
Get a meeting set up quick, and father and son must be there together. No outsiders are allowed. The father cannot bring in "his GC" as an advisor. If that stuff is going to start, you might as well bring in "your" advisor, which is either some guy named Vinnie with a low forehead, or your attorney.
You have got to have this meeting, and it really can only be between you three people.
One important prerequisite of the meeting, is that you be paid beforehand, or by check at the opening of the meeting, all your open invoices, even those that may have been submitted shortly before the meeting. No money, no meeting. You have shown your good faith in this relationship by being there to execute the job from day one. They need to maintain their good faith by paying you.
Here is the other important prerequisite, and it is the biggie. You have got to put a firm price lump sum number together, which is what it takes to complete, beyond that check you're getting right before or at the meeting.
You have said you are pretty close to finish, so you ought to be able to see the end, and put a number on it. You have to. If additional materials need to be ordered on their accounts, to finish, then get them ordered now. Order extra if you need to . . . send back what's left.
Putting a lump sum number on it helps out in a couple ways. One, it gives Dad a number he can see. He may not like it . . . as I said, he thinks sonnie has spent way too much already. But, it is the number that gets him to the end, and he wants this to be over. Secondly, it gives you, if you are good, a way to get back some or all of the give-back you made in cutting your rates.
So think about this. And for sure, follow Schelly's advice about attitude and approach.
Your most important tools right now are your voice (communications) and your pencil (estimating.) Get to work!
I think that you need to separate two issues.
The first is what you should have done and what you should do in the future. This includes written contracts, setting appropriate labor rates and other business questions. You will get a lot of help here and in the archives about doing this.
The second issue is your particular situation with this customer right now. I would advise you not to ratchet up this dispute. Do not get a lawyer involved. One of the strengths of your position (at least I hope it is) is the fact that you have been working in good faith with these folks for the duration of the job. The integrity of your work should stand on its own.
You need to have a sit down with both father and son where you can present an accounting as of right now, costs to date and projected costs to completion. They can present their concerns. Then you negotiate a solution. You may take a hit and they may pay more than they want. Probably both. If they are not crooks, they will appreciate your approach even if they do not agree with your numbers.
You are rightly concerned with your reputation. Your willingness to deal with difficulties in a straightforward manner will have more to do with this than any monetary result. Good luck.
I agree.issues separated. I am well aware of past mistakes, and making the changes needed to proceed.Future on this job:not involving lawyers unless we have to. sitting down with both father and son is not going to happen. Dad is in NYC. I have no problem taking a hit on profit for 3 more weeks, but I now must at least make sure I have the money to pay my overhead.they are happy with our work, and we continue to work work quickly and efficiently. I am going to tell them about labor burden, but I just don't know what to say. I don't want to pretend to know what I am talking about, cause I don't. not yet.thanksaaron
Just saw your post about Dad being in NYC and cannot make a meeting. The most important meeting, to date, in your career as a builder. That's too bad.
Take the meeting to Dad. You and sonnie get in his Porsche Cayenne, and drive down to the city. If sonny has lost his license, the two of you can go in your pickup.
If I was in your shoes, that is what I would do. A meeting about money, but without the money man there, is no meeting. It is idle conversation, and the conversation got way too idle when sonny was adding things to his media room Dad didn't know about.
And I have to drive further to NYC than you do. What the heck, it's just one day of work. Better yet, do it on a Saturday!
I would do exactly as Gene says. You will be taking control, showing force of personality, and making it known that you want all of the issues solved NOW.
so, just an update.
we have been paid what owed.
we will continue to be paid.
of course, I am not charging enough for my labor, and am looking forward to having that aspect of my business worked out for the next one.
there are many good posts to read right now.
thanks,
aaron
Great news. Can you give us a little more of the story about how you reached a resolution?
not much to say that hasn't been said,but as a self employed person for 30 yrs, i admire your integrity. stick with it and you will do great. larryhand me the chainsaw, i need to trim the casing just a hair.
There are projects that snow-ball into larger ones then there are avalanches. Yours is an avalanche.
I would'nt care much for another GC brought in to critique my billing practices any more than I would do it to another. There are way too many variables for someone to compare their business to yours
I would'nt continue much further without a target monetary figure on the table agreed to and signed by all parties involved. I would also do it before I made a major material purchase.
Usually when I am working a contract price, discounted for volumn amounts of work, a change order is gravy billed at full value. It sounds like thats not working for you in that manner. You are discounting the change orders at their will.
My suggestion... stop now and don't resume until you have an agreement. I have seen this scam run here in Columbus WAY too many times. It's rumored that there are websites that actually TEACH this stuff... although I have yet to find them.
The way it works... the original deal is struck on xyz project (small). Then, the scope increases to a point of lunacy. They wait until the job is in a position to finish themselves... then throw you off the job. It is a scam... it is a scam... it is a SCAM!!!!
I fell prey to this EXACT thing when I first started (still in litigation). Lawyer (I shoulda known better) wanted a small room in his basement... ended up as a complete basement... including conversion of the crawl-space into finished space. 500 sq ft "room"... to a 2500 sq ft basement with fully built-in features. Called us off the job with three days left.
Long and the short... I was out 30K before I knew it... and now had to lien his property and am fighting every imaginable screwball technicality known. Best part is... his 1st mortgage was not recorded... so I'm first. This is NOT going over well with his first mortgage holder... and may be the piece of leverage that will swing this thing in my favor (they are getting ready to call his mortgage). If it weren't for that... I would probably be tied up ANOTHER two years (it's already been two).
Good luck... and do as I did... use it as a learning experience and put procedures in place to assure it doesn't happen again.
Rich, that's an amazing story!
I'm curious...how did the mortgage company end up in a second position? Did the title people drop the ball and hold onto the deed/lien? Or did you just luck out when the guy was in the process of a refi?
Could you name some of the technicalities that the lawyer tried? I think that info would be good for some of us oldtimers....
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Title company screwed up... but as it turns out... the title company was not exactly "arm's length" from the attorney. But that is an ENTIRELY different thread!
Technicalities... well, the list is long and dubious.
3 day rule. As naive as I was... we started the day of the 3 day rescission and not the day after (per his request). He claimed he could cancel the contract and not be charged anything on the contract... AFTER 4 MONTHS OF WORK!! Almost worked... and may be a subject for appeal if he loses and decides to appeal it.
Shoddy workmanship. His example of shoddy? One door still had to be shaved for carpet clearance. The jointer was on site, and the door was scheduled to be fixed on the day we received notice. However, the "independent" that was hired by him to evaluate listed it, along with "trim not complete" (DUH) as the "shoddy" part.
Permit technicalities. We had pulled a limited permit for the "room". When the scope changed, we pulled a general remodel permit. He claimed we did not close out the original permit,,, thus the new permit was invalid. Luckily, this had precedent to back us up. Once the amended application is filed, the old permit is void.
Violation of building code. What could it be? 1/8 of an inch on headroom clearance for new stairway. Passed inspection with a note of variance. But now, he is challenging in court, stating that he had not approved the variance.
Has tried to claim that every work-change was not approved by him (4 months... and he approved nothing?) Luckily, I had very detailed logs of both my subs and my work (and dates and times of changes). As a side note... this schmuck even tried to hire one of my subs to finish the work after he removed us... and wanted him to do it on MY permit!!
EPA. Claimed we violated EPA regs when a small amount of dirt got onto roadway and was washed into storm water system! (don't EVEN get me started on this one!) After 2 hearings... the EPA guy said he was tempted to bring charges against the lawyer... for such an idiotic charge. Still didn't keep me from having to defend it (2 hearings, 2 hrs each hearing... 210/hr)
Claim of inflated charges. Claimed that my offer of a settlement was actually a bill... thus I could not claim the higher amount when I liened his property. Luckily, I had sent a letter to remove the offer from the table before I liened... otherwise, I would have been stuck on this one.
Those are the top ones. Each one has had a hearing of one type or another. Somehow, he has been able to demand a hearing on each charge as he has added them.. this costing me additional money. Each time, I have prevailed. But the cost of litigation is very high... and the chances of recovering my attorney's fees are slim. At this point, it is personal... and not about the money. Have I been a perfect saint and not done ANYTHING wrong? Nope... but fortunately, it hasn't cost me... yet.
BTW... this guy has done this scam two other times. Once with his kitchen remodel, and once with a reconfiguration of the upstairs area. I found this out after I had left the job.
Another BTW... I should have seen it coming when I presented the first bill... and each subsequent one. each bill was like pulling teeth to get approved and paid. He questioned every single line item (which is another thing he has used against me... although that one didn't require a hearing. By paying the bill, he implied settlement of the disputed charges, and the magistrate tossed it as a defense)
Edited 2/28/2005 8:04 pm ET by Rich from Columbus
Wow, Rich...that was indeed a mouthful! Thanks for sharing. Your info should go a long way toward helping those in here who remodel. If they can't understand how/why they should document and keep everything in writing, they ought to post your reply on their bathroom mirror.
Now....let's say you were going to do some work for a lawyer again. What would you do different to protect yourself from this type of abuse?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"Now....let's say you were going to do some work for a lawyer again. What would you do different to protect yourself from this type of abuse?"
I have made the changes. I have become a phalic when it comes to change orders and such. I have also become a phalic about collecting money up front, with signed agreements as to scope.
Each change in scope... additional or replacement contract. I collect money up front.. and if they don't wanna pay up front... "I was looking for a contract when I found this one"
Each description of scope is EXTREMELY detailed... and describes each and every stage of the process. Any and all change orders are billed as soon as complete.
If a customer wants to challenge every item on the detail billing... I get real nervous and let it be known. If it can't be worked out within one day... I pull my tools. If it's not worked out within one week... I have my attorney send them a letter explaining my intent to lien (haven't had to do this yet... but I would if it was required).
I have requested my contract be reviewed by my attorney at least once every six months to assure that it still complies with any changes in case-law or legislative actions.
I NEVER start a job early. 3 days is the rule... I wait 5. I get the notice signed and notarized (luckily, I have a guy that works with me that is a notary). I give the customer a copy, I keep one copy, and I mail the third copy to myself... not opening it when it arrives (as proof of a definitive date of contract signing).
I have become very cynical after this experience about trusting anyone (the guy was referred by one of my best customers). I have to be very careful not to project the behaviors of this cretin onto other potential or current customers. It's not easy though (as I get ready to send another $3K to my attorney tonight).
Ohhh, and I do have one other suggestion. PUT AN ARBITRATION CLAUSE in your contract. This probably would have been over by now if I had one. It is not a clause that is COMPLETELY binding... but it does lay out a procedure for dispute resolution that is VERY much incented for both parties to work it out... without going to court. All kinds of liquidated damages clauses, and other legal crap that I have been told will "probably" be upheld... but hopefully will never have to be.
Each description of scope is EXTREMELY detailed... and describes each and every stage of the process.
Could you post an example of one of your proposals/scopes.
I'd like to think the ones I've written are pretty detailed, however I know they're not.
I'm just looking for ideas on small items to put in...
Lately we've been putting in things down to the sheen on paint, labeling swithces as single pole switches (opposed to dimmers which customes dont seem to understand do cost more, albeit a small amount) and a few others
so far, knock on wood, nothing horrable has happened, but giving in for 5 bucks here, 20 bucks there, maybe 50 on that one... it adds up fast.
For the 'small stuff".. I have allowances for materials. I figure my materials cost based on x... and thus, I put the "x" in as the allowance. If the customer changes the switch from a pole to a dimmer... I make a change order.
By "extremely detailed"... I am referring to the stages of the process, and specifically limiting the scope to the actual job.
Example would be having to clean out the space before we can get started... or if the customer puts items into the space. I specifically address this by stating that any moving of items in the space will be charged at x dollars per hour and payable at the end of any week in which the activity occurs.
Each situation is different. After a proposal is tentatively accepted, I put together a materials list (with allowances) and a work plan (detailed). I go over the materials and work plan with the customer and make sure they are educated on the process, materials... and are on-board with the plan. I then have them sign off... and we begin work. These documents are incorporated into the agreement.
I agree. The "small stuff" -details like who clears the site before demo starts- adds up quickly, and is just the kind of thing that gets taken for granted by the HO. Involving them in the thought process of all these things will give them an appreciation for how much everything costs. If they decide to leave it to you, well, at least they've contemplated the time it will take, and they know your rates.
Wow Rich.... what a freakin' nightmare. I do admire your perserverance with this. I seriously don't know that I could keep my composure through the whole ordeal. Sooner or later I think I'd try to knock his teeth out of the back of his head. But then again I'm young and probably still criminally insane. Although I'm betting you've considered it a time or two!
Thanks for sharing that story.... we all need to be reminded of those type of predators from time to time.
The brass knuckles have been taken away from me once!! LOL
I did think about taking a buddy of mine's track-hoe over and telling him that I bet I could unload it, and take down his house before he could get the cops there.. but thought better of it!
It's a shame that guys like this can't be found out beforehand. I have even investigated the possibility of putting up a website, for builders to access, that lists people like this... but my attorney says it is too much like a credit reporting bureau for his tastes. Still trying to come up with an answer. Like I said.. this guy had done it two times before and got a way with it (probably why I am taking it so personal... naw... the guy is a pig... that is why!)
Edited 2/28/2005 8:30 pm ET by Rich from Columbus
There are two ways it goes.
If you know the cost of the work, you can state a fixed price to the customer and stick to it.
If you do not know the cost of the work, you can't, and so you work T&M.
I never understand contractors and owners who are doing a job T&M, but are using an 'estimate' to work against. That's just a setup to hang the contractor, as far as I'm concerned.
If I knew what it was going to cost, I'd tell you.
This maybe antithetical to a builder, but when you're in a hole stop digging.
One of the hardest parts in running in business is knowing when to say stop or no. It sounds like a small piece of advice but if a project is going out of control STOP, step back take stock, get your thoughts together make a plan and execute the plan. Do it on paper, even though I know 'you're really good at keeping everything in your head', so I am but I still write stuff down. There is always a huge temptation to keep going, in the hope that the money will keep coming and progress will be made, but invariably it doesn't.
I have no way of knowing if you are being scammed or not, but at the very least it sounds as if the older and wiser father has now stepped in and is starting to make decisions and take control of a project that you should have had better control of yourself. Your job, and learning oppertunity is to understand this and regain the control yourself, and attempt to exit as gracefully as possible while not loosing money, you should not be building their house for them.
Next time you will know to sign the state mandated contractual agreements, so that you have lien rights, and put everything in writing so that both parties are clear.
The good part in all this is that you realize you are in trouble and know to ask for help, many people don't and they are usually the ones that fail.
Good luck
Unless they are holding a large chunk of money due you and you fear you legally can't get it from them, don't let them dictate your rates!
If you are pretty much paid up to date for the work you have done , then tell them that you would like to finish the job, but if they insist on a lower rate, you simply can't accomodate them, so for them to feel free and get whomever they like to finish the job.
Time and material is just that...payment for your time plus material costs. You don't have a lump sum bid whereby you agreed to complete an entire project for "X" amount of money. And, they can not hold you to an estimated cost...because estimates are "rough"...not final.
These guys sound like they ( not you) got in over their heads...they wanted too much, and now they want you to come down in price so they don't have to pay.
If they initially thought your pricing was fair when you began the job...there is no reason for them to question it now....especially since you mention they speak highly of the quality of your work. To ask you to lower your price is so they can cover their ####....this bit about another GC being brought into play to scrutinize your pricing is downright wrong...they are simply trying to strong arm you.
When dealing with T&M, I always demand a deposit "up front" before work begins...then I submit periodic draws from that point on. With the upfront money, and the draws, I am always ahead of the game for what is due me. What I mean is that if I chose to walk off a job due to some type of disagreement, then I would be the one who may have to refund some funds to the OWNER rather than visa versa.
Always try to be in that driver's seat, and you will have better leverage with clients who suddenly become too demanding.
If for some reason you do not wish to leave this job unfinished, at the very least, write out this last bit of work as a seperate contract. You should have no difficulty in writing it out as a lump sum bid since you now have a good grasp on the final job scope details. Ask for a deposit of no less than 50%....ask for more if you think they may try to welch on their payment. If they are unwilling to meet either demand ( agree to a signed contract and/or a cash deposit) then walk away....fast.
Davo
Thats good advice Davo.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
There are lots of good carpenters that go into business on the basis of their carpentry skills. Usually, they don't last very long. Sometimes they get into some serious money problems. The approach you have taken with this job is a good example of what you should never do. You really don't have a leg to stand on without written contracts and change orders. You have put yourself in a very bad position. It's hard to tell you what to do at this point. You don't have any info in your profile so we don't know where you are from. In some places, working without written contracts is against the law. Without the law on your side, you have big problems. Perhaps the smart thing to do now, would be to find a good lawyer and go in for a consultation.
So far you have shown the customer that your terms and conditions are negotiable. This may be your saving grace. You may be able to come to a negotiated settlement of what the customer owes you. Technically they can just tell you to take a hike and refuse to pay anything. You'll have to take them to court where it will simply be your word against theirs. Getting in an adversarial position at this point would be a bad move. Talk to a professional so you know your options. They will be able to show you how to avoid this situation in the future even if they can't do anything for you on this one.
Beat it to fit / Paint it to match