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I am very often finding myself in situations where the sub contractor at the end of the project is asking for more money.

This is despite clearly agreeing to a fixed price at the start of the project. Often at the end, they will complain that they feel short changed from working longer than expected. This is despite them setting the time frames and not delivering the work in that time frame.

What is the best way to handle this? I remind them that we have agreed on a fixed price. They cannot say much, but it does end up leaving our relationship strained.

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  • What kind of projects? Sep 30, 2016 at 13:47
  • this surprises me. More info plz!
    – Ewan
    Oct 1, 2016 at 8:51
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    Fixed price should mean fixed scope - if they take longer to deliver that scope then that's their problem. If you changed scope, then it's right they get paid more
    – HorusKol
    Oct 6, 2016 at 12:55

1 Answer 1

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There are always two sides to a story. You should stick to the terms of the contact, which means honoring the fixed price assuming the scope was delivered, no matter if late (claiming any penalties if you had them in the contract). However, this also means to pay attention to the oft times ignored assumptions, exclusions, limitations, and any other exceptions written in and agreed to within the contract.

Complaining that they worked more than expected is a weak argument and a non starter. Unless they're completely unsophisticated and way outside their depth, my bet is they have a laundry list of items that meet to some degree the exceptions written into the contract and that you grabbed the weakest of the arguments in your OP. I don't know you but I watch this all the time. It's a form of confirmation bias so you sort of paint a picture to get the results you want to hear. YMMV.

That said, sit down and have a professional, open conversation and listen to their arguments and look at the contract and see how they may fit in the terms and conditions to which you agreed. A win-win outcome is best for all of you, protecting both of your interests and your long term relationship. If they truly have nothing to stand on, then commit to helping them with a better contract next time so you two can be true partners in it for the long term. If they're facing extinction, and you value them and their work, you may want to consider violating your agreement and get them in a better place if you can afford to do so. Long term wins.

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