Forum Moderators: LifeinAsia
here's the story (I'll try to keep it brief).
We put a development contract out to tender to three individuals. We then selected the one we thought would be best for the job - based largely on his past experience and also his approach and attitude. We were looking for someone who we could work with in the future, when certain skills would be required that we didn't have in-house.
So a price was agreed based on the number of days that he estimated it would take to complete the project. The cost was slightly higher than our budget - we had no reason to complain though, given the perceived complexity of the project, and the recognition that our budget was on the low side - so we were happy to agree on the price.
We are now just days away from the originally agreed completion date (as estimated) and although a good start has been made, we are probably only half way to the finishing line. The developer did state in the beginning that it was difficult to estimate the length of time it would take to complete but given that he is the expert we assumed that his estimate would be about right - if anything, we thought that he was playing it safe and allowing himself more time than was absolutely necessary.
No mention was made about what would happen if the deadline was missed - largely due to the fact that we were not in a great rush and only envisaged the project running over the completion date by a week or so, at the very most. Our way of thinking was that it would not be in the interest of the devloper to drag his heels - he surely needs to complete the job to get paid and then he can move on to his next project.
We have built up a good relationship with the chap and have enjoyed working with him. His techniques are cutting edge and there is no doubting his ability.
However, we are now sensing a little awkwardness when we meet. It is becoming obvious that he has underestimated the complexities of the project - I would put this down to a bit of inexperience on his part and perhaps a bit of over-confidence. Okay fair enough, this can happen. The completion date has now been extended (by him) to reflect a more realistic finishing date.
The question is, will he ask for more money? In reality we would actually not mind giving him a bit more fee in recognition of his work and the time it will have taken to complete the project. You may be thinking at this point that I have lost my mind, but its not that simple, we now realise that (a) the project is highly complex - much more so than was first realised, and, (b) we have got this guy cheap - okay, the market is not in his favour at the moment but his skills are undoubtedly worth more than what we are paying. There is also some talk of further projects that we have identified for him and we'd like to cement a relationship with him.
So my dilemma is how to tackle this issue - I am now thinking that rather than waiting for him to ask for more money, we should be the ones to bring up the matter first to show an upper hand. To show that we have already anticipated and identified a potential problem. BUT, and here is the BUT - how to approach him without leaving the door wide open for him to put up the price too high. We are a young company and can't afford to blow our reserves at this stage so its crucial that we don't get held to ransom, and also that we don't appear to be 'weak' and charitable.
One thing we have going for us (in terms of bargaining power - for want of a better expression) is that we are not the creators of the problem - the project was specced thoroughly and we have stuck to the original requirements. We've been a good client and given the guy a free crack at the whip.
Luckily - and credit to us for selecting this chap - he seems like an honest guy from a good background. I think he will be reasonable but I'm sure he will want more money - anybody in their right mind would.
Any advice on this matter would be GREATLY appreciated. Perhaps some of you have been in a similar situation. We want to do the 'right' thing, but we can't afford to 'give' too much and expose ourselves.
Many Thanks in advance.
Been there; done that.
Quite simply: I'm sure he is aware of the awkwardness also, and he, himself doesn't know how to proceed to approach YOU.
I would suggest a simple meeting. Explain to him that YOU realize this is a bit more more complex than when it was first bid. And that his work is outstanding. Ask him then, "If there's anything we can do for you to accomplish this task in short order. Do you require more money? Or more time?"
I'm sure he's uncomfortable with the existing arrangements as they are...and he's probably got that in his head...which makes it that much harder to concentrate.
Perhaps a simple 'pat on the back' or 'vote of encouragement' will allow him to concentrate on the issue.
It has been my experience that if a project goes overdue, and I did not check at the half-way point (time-wise) to verify things were on schedule...it was my own fault. It's just good management to know exactly where things are at during a project...no surprises.
You're paying him. You have a right to know where things are at. You want to retain him for further duties. That's good. Make it plain, AFTER this project, that due dates are DUE dates. And ask him to bid accordingly in the future.
What it comes down to is respect. You see that he is good at what he does and knows his stuff. In his eagerness to get the job he obviously boxed himself in with a low bid. If you like him and his work then I believe it is in your best interest to cultivate that. Call an update meeting and discuss where you are and how much more there is to go. You can either offer to put more money in the pot and explain why you believe that’s a good thing or, offer him a bonus if the work is accomplished within a certain timeline. The second may salvage his pride and you both win because the work is completed, everyone feels good and you have the chance to continue forward with your work and future projects.
Thanks for the reminder that there is still humanity within the business world.
That's how good relationships grow into great relationships.
as a person who contracts work to others sometimes
i'd be wary of offering more cash for a project running late of being more complex than before ... would that not create a precedent? will he let the next project run late so he gets more cash?
i'd also be wary of offering more cash because the project is more complex ... what's to stop the next project ending up "more complex" too?
i'd also be wary of offering a bonus for early completion ... if he rushes, will the quality of his work deteriorate?
i wouldnt want to push him into a meeting to discuss the late running etc. it would only take his mind off the job. phone calls would be awkward too. i'd go for an informal email, friendly and polite.
definitely let him know that you appreciate it's going to take longer to complete and that you appreciate the quality of his work and you'll be asking him to do more work for you in the near future.
as someone who takes on a lot of contracts
i normally have several contracts running at once - if i get stuck or get bored, i can move onto something else. it's often awkward fitting everything in, but it's also a challenge that makes the contracting more enjoyable (or tolerable).
if i was bored, no amount of extra money would help (and believe me, i've had some seriously boring contracts).
a bonus for earlier completion is always welcomed. but, it would have to be enough to make it worth demoting another contract. what if the ABC contract will be complete and payment will come in next week, whereas XYZ will still take 3 weeks to complete. do i really want to delay ABC and get no cash for another couple of weeks just to get a bonus? do i want to risk losing the ABC contract altogether for the sake of a bonus?
pressure would put me off doing a particular contract - every company thinks i am contracted exclusively to them. the answer phone goes on, emails are replied to next day instead of within an hour, and their contract slips down the pile.
a friendly approach will often encourage me to do a bit of work. a buttkissing approach will demote the contract to the bottom of the pile.
ho hum ... back to work for me i suppose ... good luck with it stavs ...
Offering money would be a nice gesture in good faith. The important part is how you offer it. If you just call him up and say "I will give you extra to get it done by X date", you are probably reinforcing the negative behavior.
If you meet in person and have an upbeat heart-to-heart about things, it could strengthen your relationship with him, promote open, honest communication in the future, and he is likely to put you on priority because you are a great guy to work with. If you feel it is appropriate, offer a little more $ for this one instance. Make sure he knows it is a gesture very much out of the norm.
Good luck!
The support I have felt from this thread has been greatly encouraging. Its a relief to know that our proposed actions aren't seen as foolish. These things are rarely black and white - we have to look at the big picture to make the best decisions.
At the end of the day its about achieving the desired effect. Purely obligational relationships with contractors rarely bear fruits in the long term. There has to be a mutual respect, communication, honesty, etc. It comes down to the old cliché: 'Everyone's a winner' - and surely that's what its all about.
Crazy_Fool, thanks for advising caution - its important to be careful. Not all contractors will reciprocate their clients' good faith - this is so true! Those that do, however, are the ones that will really reap the benefits.
> It has been my experience that if a project goes overdue, and I did not check at the half-way point (time-wise) to verify things were on schedule...it was my own fault.
Good point, ScottM - we should have made a point of this.
I shall be meeting with our man next week to talk it through. There will be a bit more 'money in the pot' for him - and if our gesture is received in the same spirit in which it was given, our relationship will be a lot stronger for it!
> Make sure he knows it is a gesture very much out of the norm
Thanks Travoli - I will.
> Thanks for the reminder that there is still humanity within the business world.
And thank you all too for the same. It makes good business sense ;)
If I were you I'd be looking for a discount, not paying more money, he was the one who underestimated it all
If he is in charge of getting your site listed/ranked/designed then youre pricing is always gonna depend on what you get back at the end of the day from it.
If you rank high, the design sticks, and everything goes well, you can be glad you stuck with him. If he can finish the project thats great! But some people HAVE ended up paying good money for a dud framed site sorta thing, so its good that there is a sorta cross-thinking going on between clients and webmasters as indicated here
Offer and acceptance
The seller states his price for the service and you except. The seller is obligated to complete the work within the timeline at the price quoted.
If he fails to complete the work by the first deadline then give him another deadline. While you give him another deadline get another quote for the work to be done by another company/individual.
If the work still hasn't been done by the second deadline then give him one more chance. If he again fails to keep the deadline then get the work done by the other company using the same rules.
Seems tough but this is very effective and is fair to all parties. You must ensure that these deadlines are agreed by both parties.
One project we had went well over and it greatly affected our business. We won't be stung like this again. If you stick to this then everyone benefits including your worker ( he will learn for the next time to ensure he sticks to his word and will be fairer on his self the next time.
This way of doing business is based on Islamic Sharia and works.
Overall it sounds like you are handling it very well. I know what it is like to be up against deadlines and miss them. People deal with those type of things in very different ways and in it sounds like you have a great attitude and outlook on the situation.
Point : You want to maintain the relationship. Everyones got to start somewhere, and hopefully the guy will learn from this experience.
Point : Cashflow is a concern. It always is. Whilst you wish to be fair, costs must not rise out of control
Possible solution : Offer a small extra payment up front to cover the extra work. As the "bonus", offer either a %age of resale value of his work (say 3% of gross sales within 12 months, if that would be appropriate - I know nothing about the resale potential for your product), or 1st refusal on further projects suiting his skills for 12 months, or similar. In either case, the "bonus" is dependent on timely delivery and acceptence of the product. This may require a little more negotiation to ensure an achievable timescale is agreed.
If he does the job, you are happy. Also, either of these solutions has the advantage of strengthening your ties to him, without commiting you to him too strongly, and without slamming your capital
However, to avoid similar problems in the future, you must ensure you have procedures in place to deal with these situations. Not all contractors are nice <grin>. Before commiting to work with any external contractor, we have them sign an agreement outlining each parties rights and responsibilities. Nothing heavy, but it'll save us real problems one day, I'm sure.
