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Ethics Question

Discussion in 'Commercial Snow Removal' started by Mike Fronczak, Feb 26, 2003.

  1. Mike Fronczak

    Mike Fronczak Member
    Messages: 64

    Is it ethical to bid on a property knowing full well that it will be plowed differntly than contract states?

    This is my dilema: We bid on two properties this fall, next to a plaza we service. I have bee keeping an eye on level of service as of late. We bid as speced; 3 inch trigger, per trip pricing. I noticed while servicing our plaza which has zero tollerance policy(plow, shovel, treat at anything), that these properties have been being serviced(actually watched) at very low acumulations(less than 1 inch) & by two differnt companies. Obviously we were high as it takes longer to push out 3 inches than 1, & less frequency must be charged for, ect.
    Is it ethical to bid properties (at per push)with a contract stating
    3 inch trigger(priced for 1 inch), & plow at much less(1 inch)? I haven't done it, but I have never had a customer tell me we come to frequently either, but have had seasonal priced customer complain when 2 inches is on lot & have 3 inch contract however & even some per trip.
    Standard spec. I hear in area is 3 inch from customers. If it is standard to plow at much less then I probably should adjust my pricing? If I did spec in contract & plow at less I know customers could question why we came, but it would probably be worth the risk. This seems common pratice in my area, just questioning business ethics I guess.
     
  2. wyldman

    wyldman Member
    Messages: 3,265

    Well,I would not set the trigger high and plow anything less than the trigger.Too confusing for the customer.You'd get a lot of complaints.Customer would have the right to refuse payment as the services would have not been within the terms of the contract.

    I have seen a lot of companies that price on a very low trigger,and at a much lower price,due to less snow,to get the work.Some places look at the low price per push,and will jump at it.At least this way,your covered because your doing what the contract states.

    Sometimes it helps to ask the customer for a bid spec sheet so you know what they want,and can price and supply services as requested.Then if they complain,you can tell them you bid,and are doing exactly what they asked for.

    We try to stick to our trigger points,but i will plow if it's less and i feel it is neccesary.This is usually only on seasonal contracts.They never complain,because it's all included in the seasonal price.If they are complaining all the time about 2" when they are on a 3" trigger it may be time to sell them a lower trigger point.
     
    Last edited: Feb 26, 2003
  3. Mike Fronczak

    Mike Fronczak Member
    Messages: 64

    Chris, you missed the point. I quoted by their spec. as I would assume these contractors did. They are plowing at much less. Pricing is per trip.

    At 3 inches we average 15 trip/season

    2 inches "" 22 trip/season

    1 inch 30 trips/season

    It doesn't take a rocket scientist to see that even if the current contracotor is lowballing spec. or doing what they requested he is making it up in # of trips + salt.
    THIS IS THE PROBLEM: Around here THEY request 3 inch trigger & can't seem to read a ruler. (I stick ruller in ground & see 2", they say there 3-4" on ground). I tried to sell them lower trigger point no go in fall. Many times it seems District Mgr is in charge of bidding, the store mgr is responsible from day to day or somthing the like.
     
  4. wyldman

    wyldman Member
    Messages: 3,265

    OK,I see it now.It happens alot here too.

    We have a similar problem with salt pricing.Due to competition and lowballing,price per ton applied was driven way,way down.In fact at one point it was only a few bucks more than cost of a ton of salt.Rule of thumb was lay one ton,charge for two.Was the only way it was actually profitable.It is still the same today.It's not right,and it's not ethical,but that's the way it's done,even though alot of guys won't admit it.I'll be the first one to admit it,and wish we could go back to doing it right.

    Sometimes you just have to cave in to market trends if you want to get the work.I don't like recommending it,but what are we to do ?
     
  5. Mike Fronczak

    Mike Fronczak Member
    Messages: 64

    Salting same way here too. I actually was talking to a purchasing director a couple years ago prices per ton ranged from $ 60-$175. I have subbed som salting out as we only have a tailgate, got billed for 2 ton, there was more salt on lot when we put down 1500 lbs. I sucks but seems the way this business is.
     
  6. CMerLand

    CMerLand Senior Member
    Messages: 173

    Mike,

    It frustrates the hell out of me to bid a project as per the specs, not win the bid and then watch the work not be done as per those specs. It happens both on the landscaping side and with snowplowing.

    I bid a group of banks a couple years ago that we didnt win the bids on. In the contract it specified that all walks must be cleared each time the lot was plowed. Typically, we'll clear all the entrance walks leading up to the building, as well as employee entrances etc but the perimeters we hold off on until the storm is done because the township plows them under each time. I asked the GC and was told that this would not be acceptable, so I bid accordingly.

    I drive by these banks all the time, and the outer walk at my bank has yet to be cleared from the Presidents day storm and may go back to the February 7th storm. Now granted, these are not walks that are heavily traveled by pedestrians, but they are not cleared as per the contract. Hell I might have been able to shave $ 20 or $ 30 bucks off my per push price if the walks didnt have to be done, and then been competitive with the bid winner.

    And we have a township ordinance that requires walks to be cleared within 24 hours or a fine is levied. And yet again, that turns out to just be more meaningless paperwork that doesnt really have to be followed either.

    Good luck\

    CMerrick
     
  7. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    CMerrick, I know how you feel. I lost a commercial lot this year that I really hated to lose. They didn't have a spec sheet so I turned in a bid stating triggers, times by which I'd have it plowed etc. Got a letter saying I'd been underbid so I kept an eye on it this year. I figured out I should have said " I won't plow until I'm called, then won't come until three hours after you open."

    Live and learn. :rolleyes: Oh, well. You get what you pay for (except in salting, apparently where you get half of what you pay for).
     
  8. CMerLand

    CMerLand Senior Member
    Messages: 173

    Had to run out earlier and probably need to work on shortening my posts anyhow, but wanted to add something else to what wyld stated.

    Maybe Im lawsuit paranoid, but having gone through one deposition on a slip and fall claim years ago (got us dismissed as a defendant) was worth a two years in law school. That apply one charge for two is something that any good lawyer will use to come back and cream you in a lawsuit. If you get sued you can bet for sure that the lawyer will supponea (sp) your billing records as well as your purchasing records regarding salt. You are going to look reallllll bad in court when it comes out that you only applied half the materials you billed for.

    The lawyer will start with ? Mr Wyld, how is it you billed for 70 tons of salt but only purchased 30 tons all last season???? Did you mine some salt of your own???

    Now if your saying you billed for two tons but only applied one, how can we even be sure you applied any salt on that property for sure? And since we dont know reallyyyy how much you may or may not have applied, how can we determine if what you "Claim" you used have been sufficient to preventing my client from getting hurt?

    Although you may realllly have applied enough to do the job, in the eyes of a jury (who btw just loveeee to give away insurance money) you will seem deceptive and not truthful because you've been double billing. Just seems like a dream come true situation for one of them slimeballs errr lawyers to jump you on.

    Those of you with more experience in lawsuits, am I paranoid here or does this seem within the realm of reason here???

    Thanks

    CMerrick
     
  9. BigRedBarn

    BigRedBarn Senior Member
    Messages: 133

    I don't know if this has ever been discussed previously, but I assume it has (I tried the archives but didn't have much luck).

    You talk about "trigger" depth as 1, 2 or 3 inches. But, do you ever specify time period? That is, over what period of time?

    For example, I once contracted to have my driveway/lot plowed. They had the standard 3 inch depth specified. No problem, I thought. But, over about a one week period, we got almost exactly 1 inch per day for about 5 of those days (always overnight, if I remember right). I never saw the plow guy. I had 5-6 inches in my small lot, but he didn't show.

    How do you specify this in your contract? If you don't, should you? Would it help get a contract? Let me explain.

    If you were to be a lot more specific in your contract with respect to this concept, and more specific on other matters (specifying exact sidewalk clearing, etc.), you might earn some goodwill.

    That is, if someone doesn't just go by low bid (there's got to be somebody out there who doesn't award contracts on price alone) but sees that you want to be very specific and want to do a really good job, that might help.

    It's all a matter of establishing confidence with the customer. If he sees that you're not just doing a half-fast job of quoting, but went out into his lot, did your homework and put forth a highly professional bid, it could help get the contract, I believe.

    I've heard a lot of business people complain about the people who they award plowing contracts to. Their 2 main concerns are: 1) you're there when you should be there & you do a decent job and 2) you can be reached by phone ANY TIME, ALL THE TIME.

    I went through 3 snowplow contractors in 3 years. I only asked one firm to bid each year. I see no reason to jerk people around getting multiple bids so I can pick the low bid. Whatever the one bidder bid I went with (I got referrals from friends on each contractor).

    Why a different contractor each year? I couldn't trust anyone of them.

    I didn't care if I had to pay a bit more. But, knowing that I could depend on someone doing a good job, being dependable and telling me EXACTLY what I could expect gave me confidence in awarding them the contract. And, not being able to reach any of them by phone when I needed to was the final straw, typically.

    I called them only a couple of times. I don't call people just to build up my ego. I call them because I have a situation. For example, my tenant had changed her job hours to an earlier starting time and I needed to make sure my lot was plowed out a bit earlier every morning it had to be plowed (she had a little car and couldn't get out if it wasn't plowed in time).

    I offered to re-do the contract as I was asking for something that was not agreed to. I was willing to pay more, as I was expect more. All I wanted was to talk it over.

    Could I ever get a hold of the contractor? Never. Busy signals on the main number given me, and his cell number was secret, I was told, for emergencies only. OK, I can live with that. But, to wait 2 weeks for a phone call back?

    Again, to make my point. Maybe, just maybe, if you give out some really professional-looking bids that are quite specific you might get a contract just because you appear to really be on the ball and want the work.

    I know you're all really, really busy. And I know you do a whole lot of bidding where you never see a contract awarded.

    But, if you can spend a little time getting your basic bid/contract template really sharpened up, it could help. I'd give anything to see a contractor take the time to make some basic measurements and even put in a couple of basic drawings of what was being bid on.

    If you don't have the computer skills there must be someone you could turn to to do this. For a few bucks you could probably get a high school kid to give you a contract template in MS Word that would impress the hail out of your customers.

    The bids/contracts I received from the contractors I dealt with were p!$$ poor. I'd be embarrassed to give one to someone and expect them to award me the contract.

    Am I making any sense here, or am I just ranting?

    The point I'm really trying to make is "CUSTOMER CONFIDENCE THROUGH PROFESSIONALISM."

    Maybe there's a market here for someone with some computer skills to come up with some really sharp bid/contract templates. If you had to you could take some evening adult-education classes to sharpen your computer skills, like during the off season (yes, I know, there's really no off season). Computer drawing skills, even just basic ones, could really help you out-do your competitors.

    Could you imagine how proud you'd be to hand a potential customer a bid/contract to sign with really sharp computer-generated parking lot layouts? Where you specified exactly what they could expect to get with respect to snow depth and so forth? Imagine if you specified how you established snow depth, like by using a specific weather-service reading or something to that effect (maybe an internet site with such info exists for your area)?

    Just my 2½¢.

    OK, some more thoughts after I posted and re-read previous posts.

    What about using a really professional looking bid questionaire? Ask them exactly what they want or need, maybe? Show the typical "default" values on the questionaire form (e.g., 3" trigger depth as you call it I guess).

    Again, that could impress them. It could show potential customers that you want to do exactly what they want and want to make sure all the necessary imformation is communicated between customer and bidding contractor.

    OK, I'll go to bed now. I only have to get up at 5:00 AM, right? Some of you have to get up much, much before that time, so I won't complain.
     
    Last edited: Feb 27, 2003
  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    No, I think you're making sense. I see a lot of these issues. I don't use contracts as such (people in this area wouldn't sign a contract for snow removal) so I developed what I call an "information sheet" that spells out trigger depth, time frames etc. The 1" snows a day over several days is a tough issue. Some wouldn't want them plowed and some would. So I put a 24 hour time frame for snowfall and encourage people to call me if they want them plowed. I won't just give a price, I want to meet with a person first and go over their property, listen to their needs and wants then explain what I'll do and how. Just got a call last Tuesday from a new customer who'd moved into the area. I'd sent a letter of introduction. When I talked to her on the phone, I could hear the surprise in her voice and she thanked me three times for the letter and calling her. Last thing she said when we arranged to meet next Saturday was "thank you so much for the letter, it was really good".

    I must be doing something right, business grew by 150% from last winter.
     
  11. Pickering snow removal

    Pickering snow removal Senior Member
    Messages: 151

    Wow alot of topics in one thread here first i think the intro letters mick are a great idea we have used them for about 4yrs know we also send out newsletters at least twice during the winter , it just plain makes ya look proffesional and the cust feel your being personal with them. On the issues here about triggers in chris's post i think he was just trying to say going with the flow on what the moral majority does in your area, has for the salt issue if i cant make a profit on salt be it threw the material being marked up or applying it then i would quit doing it you cant pay 60.00 a ton and apply it for that all the major contractors in this area work the same way if i bill for a ton and it takes a half to do the job correctly then thats how i recover or profit has far has a lawyer tracking total yearly salt purchase and each job site total tons billed mmmmmmm just seems it would be hard to prove were or what i did with my total seasons inventory of salt consisdering a company that has several salt contracts.

    Ok back to what Chris mentioned on going with the flow i dont mean to speak for him but ill use me has a example of going with the flow this year , we have had a 7 pushable season thus far i have a mix of triggers from wet pavement to 2in know my point here is this of the seven two were true no question asked 2plus events the rest were like a fishermens ruler ok like 1.5 to 1.75 anyway when every contractor in town is out doing comericals you go with the flow you use them has a guide i certainly dont want one of my buss with a 2in trigger setting inbetween two buss that i dont do not plowed it makes me look bad even though in my heart i know its a weak event i find myself forced to go with the flow. I have spoke with all my cust on the issue of 1.5 inches making just a big of a mess has two so i never in all the years have had trouble be paid or loosing them because of it.My brother is a ruler man if he doesnt have 2inches on his stick it becomes a fight between us many times i have to remind him that its ness to take the drive threw our whole territory and make that call hey all this said it makes for tough choices but a good buss man deals with it.

    One last topic on the attorn subject my attorn who handles a large number of slip in falls spent some real interesting time explaining to me that last year the state of michigan passed a new law limiting the number of slip and fall cases the new law termed the black ice law is basicly this if the person can see the snow ice then they could avoid it i know this sounds weird and of course my typing skills and spelling suck but the law would basicly only pay a lawsuit to black ice issues i know everyone is ready to thump me on this one but think about it even the insurance industry is trying to slow down the blood letting , between themselfs the attorns and the state
     
  12. digger242j

    digger242j Senior Member
    Messages: 672

    BigRedBarn, great post. Obviously lots of thought went into it, and if you type with two fingers like me it must have taken half a day to type.

    I don't think many customers understand what they want--what level of service they actually *want*--when they sign a contract anyway.

    Several cases in point....

    Customer signed a contract that specified a 2" trigger for plowing, but gets salt for any accumulation at all. From experience I've learned that what they want is black asphalt and white lines from corner to corner, all day long. If it's light and fluffy I might do salt only for 1.9". If it's heavy wet snow I'll plow an inch and then salt. They've never disputed a charge. They've called and requested a second salting after a brief squall that layed down a quick 1/2", and by the time I got there half an hour later it was black and wet where there were tire tracks, and getting a little slushy everywhere else. Obviously the previous salt was doing the job. They said, "do it again anyway".

    Half a mile down the road from that one is another customer. In past years he's complianed that he was plowed when he didn't need it. He wants salt "only when plowed". Earlier this year we had a 1.5" storm. I passed the place at 6 a.m. when there was only 1/2" on the ground. At 10 a.m. he called, absolutely irate. "Where are you guys??!!" (Two minutes away, just by coincidence.) I let him vent a little, apologized, and then explained our actions, or inactions at his place that morning, in terms of what his contract says. He calmed right down and asked if we couldn't just do a "partial salting" of the hill in front of the building if it looked like it needed it. I told him frankly that anytime there's snow on pavement it looks to *me* like it needs salt. Every snow since then he's gotten at least a pass on that hill with the salter.

    I think it pays to keep in touch with the customers and be sure they like what they're getting, regardless of what the contract says. My cellphone is always on, and the number is on my business cards.

    If a customer wants plowed at 2" and no salt ever, my interpretation is that they're willing to tolerate a sloppy, slushy, parking lot. In one such situation earlier this season we'd had a couple of minor snowfalls over a period of a couple days. The customer's lot looked really messy, but there wasn't two inches of snow anywhere. I stopped in and asked for the guy in charge and specifically said, "Your lot looks sloppy, and I'm second guessing myself as to whether I should have plowed it or not. You contracted for a 2" trigger and it hasn't met that yet, but I'd hate to think you're looking out the window wondering why you haven't been serviced." He thanked me for checking but assured me that they were happy.

    As far as really specific contracts--It might serve to impress some potential customers, but in general I think most of us would prefer a contract that nails down *exactly* what the other guy's obligations are, but allows a maximum amount of "wiggle room" for ourselves, and that applies to everything, not just snowplowing. In the end you need to find a happy medium between the two.

    I like the suggestion of a questionairre. I'd been thinking of something along that line myself. Moreso than even clarifiying between customer and contractor what is expected, it would serve to make the customers actually *think about* what their expectations are.
     
  13. Pickering snow removal

    Pickering snow removal Senior Member
    Messages: 151

    Amen digger well put things i was trying to say has well but you did alot better job explaining bad typing skills here lol
     
  14. digger242j

    digger242j Senior Member
    Messages: 672

    Fred got his reply in while I was typing my previous one.

    Just an additional point about "going with the flow". One event earlier this year that I *measured* at 1.5" everywhere, and the other guys all seemed to plow. I called customers and said exacatly this--"I measured your snow at 1.5" but your neighbors got plowed by their contractors. I don't want you to think we haven't been to your place, and frankly it looks sloppier than the lot next door. Should I have plowed yours this morning?" They were all satisfied with the service they got. But, had I not spoken with each of them I'd still be worried that they'd have felt neglected for that particular event.
     
    Last edited: Feb 27, 2003
  15. wyldman

    wyldman Member
    Messages: 3,265

    CMerLand

    Your probably right on the lawsuit issue,if they really wanted to go that far they probably could get our purchasing records and match them up to the application billings.

    I just wanted to clarify here,I'm not trying to say every time we dump 20 tons,we automatically bill them for 40.Sometimes we actually put down more than we bill for,just to keep the customer happy.There are also times we may only dump a half a ton and charge our 2 ton minimum.

    Prices per ton applied around here have gone way down,some as low as $70.00 per ton applied.Some guys are paying that per ton of salt delivered.We are lucky and get it for under $50.00 a ton,but it's still not enough profit.If I send a salt truck out for a 6 hour run,and we dump 40 tons,and we bill for exactly the 40 we used,we would barely pay for the truck,insurance,salter,and driver.I don't work for free.I don't like doing it this way,but we are forced to due to market conditions.Most everybody knows it,but the guys in accounting want to see the lowest dollar amount per ton applied.
     
  16. CMerLand

    CMerLand Senior Member
    Messages: 173

    Chris,

    I completely understand your situation just want to make sure you thought of some of the possibilities. Might I make a suggestion of a per visit fee to cover expenses, plus materials with a markup? Or perhaps even better, a minimum application fee which takes into account your drop 1 bill 2 situation?

    If your typically billing them for 4 tons and actually using 2 to 2.5 or three whatever, have the 4 tons as your minimum per app price. Then you can bill what you need to get, but only track what you actually used materials wise.

    What Im suggesting was more for the perception of a slip and fall jury then if your clients were trying to get you for mail fraud or something. If the jury percieves that you were dishonest in the billing side, they may perceive that you really didnt do what you said you did.

    Just my thoughts.

    CMerrick
     
  17. wyldman

    wyldman Member
    Messages: 3,265

    Around here they only want per ton applied pricing.We do have a 1 ton minimum on the lots that we salt as per contract,and a 2 ton minimum when they make they call.We don't get into minimums very much as most of our properties and complexes are huge and require 8-10 tons per visit.It's not uncommon to dump 70-80 tons a night on a salt run.

    We do use the min apllication fee for some smaller accounts,and the few residentials that we do.

    I do appreciate the heads up on the legal end though,and will be double checking things to make sure we cover our butss.
     
  18. SnowForeverSnow

    SnowForeverSnow Junior Member
    Messages: 1

    Ethics

    If I'm not mistaken, It's also a felony if you knowingly mail an inflated bill.