Payments help

[ac.electrical]

I need a bit of help im tendering for a big commercial job and was wondering what you guys ask for with regards to the payment process.ie how much up front,some money on the first day.etc can you give me some help as im new to the big mpney game.

Cheers

 

[gunner]

we used to work on stage payments of 25% of the price at each agreed stage of the job,hope that makes sense

 

[ac.electrical]

Did u receive a payment right at the begging of the job?

 

[gunner]

yes,start up costs etc,typically 25%of the cost then another 25% three months in etc.

 

[ac.electrical]

ok cheers, say if the job is 2 months but a good 60 grand worth. should i ask for 25% at the start and 25% half way through then the rest at the end.If not wat way?

 

[boatnik1]

Interesting how things work in different areas or in different times. Standard here (many moons back) was at tender stage the payment stages were subnitted as part of the tender with a typical standard of 25% payable at halfway, again at three quarters and again at finish with the final payment three months after finish.
Never any question of upfront payments. and delayed final payment was to find or sort any problems.
The idea was, if you couldn't substancially finance a contract, you shouldn't be tendering.
Anyone who tendered was expected to finance the first half, and if they couldn't, they were assumed to be cowboys.

 

[gunner]

sounds a fair compromise

 

[Darkwood]

If you got a big on site contractor and architect about you can usually find a similar system in place with agreed interim payments when certain stages of the job have been completed and accepted by the architect or clark of works and they are happy that standards have been met.

 

[boatnik1]

agreed interim payments when certain stages of the job have been completed and accepted by the architect or clark of works and they are happy that standards have been met.[/quote]

I think the relevant part here is Stages completed and accepted.
I don't know of any large companies who would ---- up 25% before you start. But then I'm out of the game long enough for things to change.
If I was going to employ a contractor and he asked me for a 25% sub before he started I would be counting the pens etc on my desk just before showing him the door.

 

[MRES]

Hi
Be careful asking for money up front, I priced a £60,000 job for McLaren Construction and was up against 4 other contractors 2 of which were major players in electrical contracting. I submitted my tender, drawings done on CAD spent many late nights working on the tender etc. I was told by the QS himself that my tender was the favourite however because I had asked for £6,000 up front to get the site set up etc they picked another contractor. I later found out that McLarens had agreed with the other contractor that he could make monthly claims for materials on site and labour.

To round things up it was the first big job I had ever tendered for so it was a bit of a learning curve, ask the main contractor questions about how they usually like to work regards payments etc. I wish I had !