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Contract Question

Discussion in 'Commercial Snow Removal' started by gslam88, Apr 6, 2003.

  1. gslam88

    gslam88 Senior Member
    Messages: 168

    Hey Guys,

    I have a question, as most people know in the northeast tomorrow we are having more snow.... and as most contracts are just about over for the season, April 1st on average, what is everyones thoughts on what to charge for tomorrows or supposedly later this week..(hearing more on either tues or wed maybe in the area) after the contract is up???

    I have 1 side from someone who is saying after contract... back to normal prices..... the going rate....

    I have the other side saying that I would still charge the contract amount , because if I raise the prices that I will not get the contract renew if I attempt next year.....

    What is your thinking on this???

    Commercial accounts... not residential..... just an fyi


  2. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    My contracts are by the push, not seasonal, so it's at regular pricing.

    I think if I had a seasonal contract, I would plow at the same rate I had figured the contract for in the interest of fairness. If rates needed to be increased, I would do it next season.
  3. Got Snow

    Got Snow Senior Member
    Messages: 104

    why would it be more or less? you still have the same amount of snow to move.
  4. wyldman

    wyldman Member
    Messages: 3,265

    All of our seasonal contracts expired April 1st as well.Everything from here on is is billed hourly.This hourly rate is higher than we normally figure in on the seasonal pricing.It is clearly spelled out in the contract,so they know beforehand,just like our extreme snowfall (or blizzard) clause.I do it this way so we are covered.It pays off,as this last storm on Friday/Saturday,was very difficult to plow.Charging hourly ensure's we are getting paid for such difficult work.If it was a per push price,we'd be losing money.
  5. Acorn

    Acorn Senior Member
    Messages: 103

    If you give a seasonal price, then I think it should go until the season is over even if it goes into May (which it has before). If you say by the season, why not end at first day of spring defining the end of the winter season. In other words, by the season means nothing if you have the dates of service outlined in your contract. Pay rates after your "seasona;" rate should also be defined on your contract. I am usually so sick of snow by April that I would tend to charge very high rates after the contract dates just so nobody would call me and I could continue getting ready for spring
  6. Big Todd

    Big Todd Senior Member
    Messages: 126

    Good thing I'm not the only one with this question...:D

    Our contracts go from Nov. 1 to March 31. In the 10 years I've been plowing, I've only plowed one time in April (about 3 years ago and the snow was melting on the pavement faster than I could plow it).

    We did get one call to go out and salt last Saturday when we got our big ice storm, but that was it.

    We were forcasted to get 2"to 4" today and into tonight, but so far we have only gotten a light dusting and there isn't much else coming our way on the radar. We dodged the bullet this time (especially since I already put all of my equipment in the barn last week when it was 65 degrees plus for three or four days in a row...) but this is what I would have done in the event that we did get plowable snow.

    I would have called each customer and asked them if they wanted us to plow and told them up front about the extra cost -

    Seasonal customers: 1.5 times our normal hourly rate based on how long it took us to plow their lot.

    Per push customers: normal rate plus 5%

    Hourly customers: normal rate with 2 hour minimum charge per trip.

    Residentials: we have so few, that I would have just done them at no charge.

    Some may not agree with this, but it seems fair to me since it is not common for us to plow this time of the year. I feel it would be a good idea to give them the option too, since temps would be up in the thirty's tomorow and forty's the day after.

    This is another thing I will be adding to our contract though in the future, spelling out post season rates. Or I suppose we could extend to the end of April and add another event into the seasonal figure.

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    hey Todd

    We did salt all the commercial accounts north of 28th st on Fri night/Sat morning, and again we salted everything today. Our contracts all run till April 15. We plowed a few commercial on Sat morning as well, those from 96 North.
  8. Chief Plow

    Chief Plow Senior Member
    Messages: 201

    I don't plow under contract either ( seasonal that is ). All mine are per push. But if I were in a seasonal mode I would leave the price as it was for the season. I think that way you would not jeopardize your accounts for the next season.

    Only my thoughts
  9. JCurtis

    JCurtis Banned
    Messages: 862

    I agree....

    That if you are working on a per push basis you need to charge as you normally would.

    If you are on a seasonal contract I would just plow it as if the contract hadn't expired. It shows that you are a true professional, and that in good faith you responded to their snow removal needs even though your contract had expired.

    I would honor the seasonal contract price, but if you are close to renewal time, I would change the expiration date of your contracts to better cover yourself. ( of course I would up the next contract price a reasonable percentage to try to cover all the bases of late winter ... or should I say early spring snow storms.

    If you are on a seasonal contract I am assuming that you also have a blizzard clause in that contract so you didn't take too much of a beating this season.
  10. wyldman

    wyldman Member
    Messages: 3,265

    Re: I agree....

    It would depend on the amount of work done after the contract has expired,but I'd have to disagree there.If it was just a single dusting,then I'd take care of it no charge,But in our case,we have had several big storms,that were some of the toughest stuff I have ever plowed.If I plowed it in good faith,I'd have to close the doors.We have over 250 billable truck hours,plus loader work,and salt,since our contracts have expired.That's big money.

    If your insurance policy expired on April 1st,and you got into an accident on April 8th,are they going to pay for it in good faith ?

    Our contracts expire April 1st,as most others do in this area.If I was to extend that to lets say April 15 or 30th,then I would have to increase the contract price,which would be too high,and we would get outbid.Most people don't want to pay to be covered as this fluke snow in April only comes along now and again.They don't mind paying extra for it when it does happen,instead of paying extra every year when it doesn't.

    This year we had a lot of snow,but never enough in a single event to invoke our blizzard clause.

    A well written and easy to understand contract will help in this situation,as both the customer and the contractor know what will happen when this situation arises.
  11. BRL

    BRL PlowSite.com - Veteran
    Messages: 1,277

    I live in NJ & my area has a 24" annual snow fall average. My contracts are until April 15. I am truly surprised to see so many people much further north than my location with contracts that end on April 1 or March 31. I kind of always just assumed that the contracts for upstate NY, Upper Mid West & Canada ran until April 30 or more. In the past 8 years I have had to do a full plow run in 3 Aprils, and one other time we got less than the 2" triggers & only salted in April. Mine are all per push & the price for yesterday is the same as it was all year. Next year I will sell a couple of seasonal contracts & they will cover any potential April snow falls.
  12. Big Todd

    Big Todd Senior Member
    Messages: 126

    I enjoy hearing everyone's opinion (that's one thing I like about this site - and it's the way we learn stuff...)

    There is a downside though. When a situation like this comes up, you have 100 different contractors handling things 100 different ways, and everyone thinks they are being "professional" about it. (That's one reason I like the idea of SIMA - to set some standard practices...)

    One contractor went out and salted everything early, and then came back a couple of hours later to scrape up the slush. I could see doing that if the contract provided for it.

    The thing with us is that we've plowed more times than what we had planned for when we figured our seasonal contracts, so at this point, the customers have gotten their money's worth already and I would be operating at a loss just to be a "good guy", plowing after the contract expired. That's one reason I said that I would call each customer and give them the option of being plowed. Additionally, a lot of our customers have signed lawn care contracts with other contractors (a lot of them start April 1st...) so I'd be less inclined to be overly "nice" to a customer that has not shown any loyalty to us - business wise. On that note though, I guess I would consider plowing those customers that did sign on for lawn care with us too at no additional cost... Lots of different ways to look at it huh?

    Tom, I did salt the one place that called, and I was prepared to do more if necessary. The other customers that paid for it to be done every time were closed all weekend and by Monday morning it had all melted.

    Sorry my posts tend to be kind of long winded...:eek: :waving: