HELP... · Black Box Business

HELP...

Need the group's take on a change order fight before I reply to the customer.

Customer has 40 years in construction. We found rot behind the siding on a wall replacement: studs, a header, two windows pulled and reset, older cedar removed and reused, a corner replaced. Change order went out at $3,496.98 (20 man-hours plus materials). He wants to pay about $1,750 and is telling us what our margin should be.

Where we screwed up:

1. I didn't select top level only in JobTread, so the change order itemized out every line item, including labor and materials. He's picking it apart line by line.

2. We charged sheathing he told the crew to leave in place. That one's legit and we'll credit it.

3. We priced the CO after the work was done. During tear-off it kept getting worse the further we went, and we had to keep moving to get the wall closed up. So he never approved a number up front.

Kenny met him on site today. The work part went fine. Then it turned into margin, overhead and "why do you have four trucks here." Kenny got stuck defending numbers that are office stuff, not field stuff. Customer thinks 50% margin means we add half to cost. It's a 100% markup. Kenny admitted he wasn't solid on it either, which is on me. I plan on teaching him so he can speak on it if he needs to in the field.

He still wants us for spring work.

Questions:

1. Where would you land on the number, and how do you give ground without teaching him that pushing works?

2. Do you ever explain margin to a customer, or is "this is our price" the whole answer?

3. Once a customer has seen line-item cost detail, do you re-issue at top level or would that look shady?

4. When the damage keeps growing during tear-off and you can't leave the wall open, how do you get the customer to sign off on pricing before you keep going?

5. How do you keep your field lead out of pricing conversations on site? What's the script?

Full brief attached if you want the numbers. Also attached a few pictures and videos so you have an idea of the scope.

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HELP...