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Reducing contract by 50%

Discussion in 'Bidding & Estimating' started by Snowplowlady, Sep 25, 2010.

  1. Snowplowlady

    Snowplowlady Junior Member
    Messages: 3

    Has anyone ever had a seasonal contract that the management company handling the contracts reduced by over 50% from previous years. The company being serviced is a major Bank the management company is relatively new. Whats your take? How would you handle it if you did not want to lose the jobs?
  2. bluerage94

    bluerage94 Senior Member
    Messages: 398

    Never work for 1/2 pay...
  3. dumbyankee

    dumbyankee Member
    Messages: 66

    If the management company wants to reduce the pay by half find a way to reduce the sevice by half. Go back and wright a new contract with them. If there is nothing the two of you can agree on then walk away. Once the price gets cut in half, getting it back up will not happen for a long time. If you walk, and they hire another contractor for the amount that has been placed on the table, That contractor will not provide the same level of service you are and the customer ( bank) will see your rates are not that bad after all. It sucks to loose the account, but they will be back. Its a game. only you loose if you play into it. You should have time to come up with some other accounts to fill that void.
  4. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    What was your profit margin last year on these contracts?
    what could you do differently to reduce your costs and keep the same margin? (pushers vs. trucks, big trucks, little trucks, crew of illegals with shovels for cash, think out of the box)
    go beat your insurance people up (big cost that sometimes you can knock down)

    You gotta try
    and I would think of it as an initial offer, doesn't mean you have to take it, counter with something else, and as someone said, reduce costs. Change the trigger from trace to 2" or something.
    think out of the box

    But at the end of the day I'm probably not working for 50% less (which, as you said leaves you paying to work, really I can sit in front of the TV and not make any money)
    first you need to look at your business, what can you do differently to bring your costs down both internally and for them?