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Contract issues

Discussion in 'Commercial Snow Removal' started by Dansdad, Jan 28, 2009.

  1. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    We were able to secure 2 gas stations and the heating oil bulk plant. We thought things were going well. Then today one of the stations has closed it's 24 hour service and we were told not to plow during the night but to be sure it's clear for 8:00am. We based our bids on x amount per push which the contract says must be started at 2" or at managers request. (This would be a call out for sand and salt for example.) Fairly heated discussion with the "new" regional manager who says she will not pay for 4 or 5 pushes during a foot snow. She wants to meet tomorrow and get this resolved one way or another. The place will reopen for daytime gas pump use maybe next week.She prefers to bid out on a "per storm basis ". We are worried that we will be backed into a corner to rebid in the middle of the winter. Forcing them to abide by the contract would be costly and time consuming for us and the losing bid (who had it last year) has a friend who works at the place. Who incidently has made false comments on our service. The other station has nothing but praise and told the new mng that. We never expected this and are kinda lost as to what to do. :mad: Any thoughts would be appreciated
     
  2. Runner

    Runner Senior Member
    Messages: 957

    Sell her on what you have, and let her that to be able to maintain the quality of service, adequate compensation is required. If you have to go in and clear 7 inches of snow, ten it's going to cost 7 inches worth. I'm not sure about your price structure, but all our bids are done per push, and are all pro-rated. If we just come out to salt, then that is billed accordingly.
     
  3. KAG

    KAG Senior Member
    Messages: 114

    Well, see what she proposes and go from there. If she wants it cleared by opening time then it sounds like the push should based on snow fall amounts. If you get the feeling that she wants to change providers anyway and you force the issue then this will be a serious PITA account from then on. A per storm contract to me has you losing money wrote all over it as I am sure you would bid it for the worst case and she is looking to only pay for the best case scenario.

    The thing to remember is if you are not making money then its not a business, its a hobby and let it go.

    I probably only muddied the waters more and I feel for you. As I re-learned recently contracts really don't mean to much sometimes.
     
  4. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    We have been at 100 per push same with bulk plant. Sand /Salt are extra everytime we hit the switch. She wants to go to a per storm rate of(around 300 Guess). 2" snow great,but tonight we are getting hammered with up to 2'feet!!!. She says that she has better idea of monthly costs that way based on avg snowfall. So for tonights 12 hr storm we would be @300 her way. With our current contract we would be around 7to 800. Last year many guys around here lost big time because they bid per storm and we got all big storms. If the pumps reopen next week for daytime use and you get a big storm you have to babysit them to keep them clear and remember they must be plowed with every 2 inches of accumulation. I think our current way is better and results in a better service. We bid this way keeping in mind as well the distances between the 3 sites which is about 8 miles. It's all pretty discouraging after doing what we thought was a great job at a fair price.
     
  5. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    KAG thanks for the reply. Good common sense and I appreciate it. What really sucks is that this is a large oil company around here and I guarantee they would not "discuss" there locked in oil prices of 4.50 a gallon contracts!!
     
  6. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

     
  7. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    so, go to a per push structure.
    2-6" is X amount
    6-12" is X+ ammount
    12-18" is X++ amount
    etc

    Nobody loses.
     
  8. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    You have a contract. Make them stick to it. If they want to change it for next year then ok. You are in the right and don't let them push you around.

    Now to keep them happy you have to sell your services to the new manager. If the customer can't get to the pump, they won't pull in. That's lost revenue. If they do pull in to get gas and don't want to walk through snow to go in and buy more, then that's lost revenue.

    Good Luck
     
  9. Kunker

    Kunker Member
    Messages: 96

    Is that really per push, or per event? Everyone seems to use these terms interchangably.
     
  10. Allens LawnCare

    Allens LawnCare Member
    Messages: 90

    Ask her if she has a better lawyer that can void the CONTRACT you say you have
     
  11. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760


    per push
    Look, if the place doesn't open til 8am, there's no reason to do it at 11pm if it's still snowing.
    But if it's snowing from 1am to noon, you'll have to do it twice (probably)
    1 before 8am, 1 as it stops snowing.

    For example, If there is 7 inches on the ground at 7am, you charge your rate for 7" (6-12, 4-8, however you structured it). If there is 1" on the ground at 7am, it doesn't get done til it hits 2", which might be a while as you work your route (which is the downside for them)
     
  12. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    Are we talking a new person in the manager position, or a new management company all together? Keep in mind that if a whole new company is running this place, your old contract means nothing.

    JMO but I would much rather push 6 - 12" once for $300 than 2" three times for $300. Think about the time and fuel you will save, not to mention the money from another account you can pick up in your newly found "free time". Yes, sometimes you may have to push more than 12" for the $300, but other times it sounds like you will only be pushing a few inches for the $300.

    Let us know what she says!

    Good luck. I hope you are able to keep the account!

    Oh, also, remind the new manager there is a reason you are now doing the account, and the guy who did it last year, who is the friend of the employee, is not. He was not rehired for a good reason I assume.
     
  13. Runner

    Runner Senior Member
    Messages: 957

     
  14. KAG

    KAG Senior Member
    Messages: 114

    I do it a little different than most but it works for me.

    I bid and sign contracts on a per push basis only. Every time I show up to push I get paid.

    2-5 inches and its the straight bid price (2 inch trigger)
    5+ inches and its the bid price + $70hr till done (my watch is the official time keeper)

    I just do not understand the business rationale of per storm pricing.Sounds like it would work well in Dallas but not Maine.

    Firm believer in the mentality of, Its better to be Broke and Hungry than Tired, Broke, and Hungry.
     
  15. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    meeting result

    Guys your input has been awesome and really appreciated. I wrote a long response and lost it somehow in cyber space but want you to hear how this all went down and will tell the story (again) in a bit ,other duties are calling at this moment. As a teaser, we kept the deal but I think you will enjoy the whole story so I,ll get back to it this evening. Thanks again to everyone great advice and wisdom in these here parts.
     
  16. Runner

    Runner Senior Member
    Messages: 957

    One thing...and this may help clear up any confusion, if any, about the amounts. During a storm, we keep pushing the route. Whatever times the places have to be opened up, they are opened. If, in the event the places don't get done, i.e. closed on Sundays, or churches that don't get done until a necessary day that it will be used, etc., the other rates apply. Now, it also happens for instance, if a business opens at 7 a.m., and we don't start pushing it until 4-4:30,...If there is (for example) already 4 or 5" down at that point, then they are charged for that. the main thing is, is that we aren't going to start plowing a 11 p.m. the night before, and charge for say, two pushes before their opening time. I hope this clears it up.
     
  17. KL&M Snow Div.

    KL&M Snow Div. PlowSite.com Addict
    Messages: 1,616

    Dude! What was the story?
     
  18. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    We'll... First off my apologies for not finishing this saga (too much to explain here). As far as the plowing contract, I arranged a meeting w/ the manager at the location where they were in the process of removing all the inventory. I, along w/ my son and wife(bookkeeper) entered the back room and were greeted by a huge woman who was eating a slice of pizza. She stood up put, her hands on her hips and proceeded to berate us for the plowing issues and for bringing the whole damned family to this meeting. She said that she was only going to deal with one person from now on and would not be getting any phone calls like the ones she had rec'd from me. I took out my digital recorder and turned it on. She (in disbelief) said are you recording me? I said I sure am. To which she replied "then I'm done talking". I said well that tells me all I needed to know. Anything that I have to say I'll be glad to document for all to hear. And then she turns to the other woman in the room and says, she is in charge of the bulk plant and this gas station.It turns out that the 24hr store was closing, not the gas side of the business and the huge pizza eater had really nothing to say concerning the bulk plant any way!!! I called her boss the next day and voiced my displeasure over this whole mess. She was gone the same day. The other lady that we met that day was very good and happy with our plowing for the rest of the winter. I have heard thru the grape vine however that this company will only consider bids from here on on a per storm basis as they think that we made "too much money". Needless to say this past winter was a real learning experience for us. We are looking at bidding on some commercial stuff this winter and are specifically looking for non 24 hr places. I am finding it a real challenge to come up with price for this plowing business, there are so many variables and unknowns. Thanks to all for your input we really do appreciate it.
     
  19. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    cn brown pita last year they told me i had a seasonal contract w 5 sstore plus a bulk plant the following day i called to set up a time 2 sign the contract and they stated they gave the contract to a per push person instead of my seasonal price kicker is they would have spent less w me over the season screw em
     
  20. Dansdad

    Dansdad Junior Member
    from Maine
    Messages: 11

    That is where I am leaning as well with this co. There was so much more to this then I felt I could put on a forum. It was a damned soap opera. They appear to be total cut throat and I would love to see them get stuck with NO ONE to plow for them . They are actually soliciting locals who stop in for a coffee to plow for them, and then telling them that we made too much money from them last year and the manager lost his bonus(supposedly) because of this. It is border line slander and I have talked w/ an attorney. Of course all during the winter we rec'd praise for the job we were doing at the second store. I can tell you that the tape recorder shut them up and I mean right now! I also realize that I will not get a bid for them no matter what as they know that we will not be pushed around. We are a legitimate,honorable and loyal co. and we expect the same from our clients. I am not above telling any co. to KMA because I know what we are all about.