A reader asks: "Our onsite supervisor has failed to abide by the contract specifications and the customer now expects us to continue this practice without due compensation. Any ideas of how we can satisfy them and keep the contract?"

The other side of the coin to contract creep is what you described when you blamed your onsite supervisor for gradually losing site of the specifications and agreeing to provide additional services that quickly became entitlements. Although it is always good to be responsive to the customer's needs (which can change over time), it is also important to remember the customer has to pay for every service that is provided.

Assuming the bid was developed correctly and there is sufficient funds for all the real costs plus some profit, it is foolish to "give away the farm" one concession at a time. First of all, it is your job as management to manage the contract by means of reports and updates. There should be a clear policy for all onsite staff to defer to you for any work that deviates from the original specifications. This is not to say that they have to get written permission to vacuum up drill dust from a minor repair but it does mean that any work that requires additional labor, supplies, etc. be approved by the home office first.

It may be that you will provide a one time service as a courtesy with an invoice for $XXX.00 with a notation "no charge" or some such language. This does two things: 1) it shows a courtesy on your part and also 2) it informs the customer of what the cost will be next time.

Each of your contracts must be an independent cost center with a clear profit or loss based on actual costs.

Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean...

Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.


posted on 12/17/2014