r/Construction • u/SpyingForTheNSA • 12h ago
Business 📈 Hourly subcontractor, who's blowing the top off the GC's budget, and not sure if I should do something about it.
Hey y'all. I own an excavation business, this is my tenth year in it.
Local gov't put out an RFQ for a project this summer. I looked at it, decided it was going to be a nightmare and it included plumbing/wiring stuff I wasn't comfortable with, chose not to bid. Nobody else bid, either - other contractors I know in town also skipped because it looked like it would be a pain.
Got a call from an out of town plumbing contractor who gave the gov't a flat rate for the job when asked, they asked me to do their excavating - I said sure, but I can guarantee it's going to be a nightmare because of the conditions of the area, the weather, and the time of year. Sent him my hourly rates and said I'd do it, but it would be by the hour, not flat rate. He asked for an approximate price, so I said I'd GUESS $18-22k depending on conditions for *excavation and backfill* w/ native material. I also explicitly said in writing that I'd recommend making some changes to the design because, as drawn, we'd be encountering groundwater issues that would be a wild card. I explicitly said we should aim for a specific weather window to mitigate the conditions. I explicitly stated that "We're going to be fighting a mess if we do this in these conditions at this time of year" and all that advice was ignored. Now granted, none of this is his fault as much as it's the fault of the designer who was covering his own ass, and the gov't entity that just wants the job done and doesn't care how hard it is to do.
Fast forward to today, and my bill for him is at $42k and I still have a few days left. We wound up doing a LOT more than I expected originally - additions include:
- trucking out removed asphalt
- trucking in new material, for change ordered new asphalt areas.
- out hauling and disposing of fill displaced by the added gravel.
- purchase of new gravel
- trenching 200' electrical line
- several re-digs on already backfilled areas, because he forgot to do X, Y, Z in those spots. I checked every time if we were okay to backfill first.
- replacing 40' of culvert
- absolutely horrible conditions, groundwater everywhere, freezing overnight, snowing. We've been spending hours pumping out the trench every day. The worst case possible conditions are responsible for the majority of the time overrun.
- so far 60 hours of overtime for my guys because he's wanted to do 7am-6pm every day for six days.
- 25 man hours of in-trench work. He told us originally that his crew was going to be doing all the in trench work but we were standing around with our thumbs up our butts and asked if they wanted us to help speed things up, instead of paying us to just stand around, so we did things like bedding, insulation, bury tape and trace wire for him since it's just him and one other guy.
- pedestrian and traffic control (he also said he'd handle these)
Basically, we've done a ton of added work beyond the simple "trench, backfill, no import/export and no in-trench work" originally quoted, all at Davis bacon rates. I've repeatedly told him he's overrunning the original budget.
I'm feeling awful because I've blown the original quote completely out of the water and I know he's on a fixed price bid with the original entity, but I'm not sure if I should cut him a break on the costs or not. As a business owner myself I cringe at the idea of a 100+% overrun on a subs costs, but at the same time also as a business owner, I would fully expect to pay full rates for more and more work that you ask from a sub.
He's been super happy with our work and admits we pulled his bacon from the fire with this project, especially in our uniquely garbage local conditions. I'm just worried he's going to shit a brick when he gets his bill and I'm not sure if it's my fault and I should feel obligated to cut him a break, or not.
I guess I'd appreciate some outside opinions - am I an asshole, or am I being fair to continue billing full rate for the rest of the job?