Service tech overcharging us. Legality?

[BRIAN.T]

We hired a very large and very reputable machinery sales company to perform preventative maintenance on our two newest machines (they aren't very common machines). We purchased the machines from them. You have certainly heard of this company.

They sent us an estimate for $5600 for BOTH machines, their estimate says 8-16 hours per machine, and any additional charges will be discussed. See quoted text below.

"We will work on your machine no longer than necessary performing PM, correcting minor problems and making alignment corrections to bring the machine back to the original specifications, when possible. You will be informed of any issues with the machine and given a recommendation of what would be needed if it cannot be corrected reasonably during the PM"

Now everything is said an done we've received our first or two bills, machine one total cost is $16000. Add the second machine and we're looking at $32000 for preventative maintenance. It's outrageous. Apparently they spent days removing and wiping down panels.

I called and spoke with the service manager who told me their service tech cleared everything with me personally. I responded by telling him i work as a programmer for two companies, and was only at this location 4 days during the entire 2-3 week process. He then changed his story to "oh we cleared it with the owner" also not true. After some back an forth he agreed to cut the price down to 16k total.

Now I don't think these guys are intentionally trying to rip us off, we believe they came in for service got in over their heads with, possibly have never serviced one of these oddball machines, didn't think to inform us they were learning how to do it while on our jobsite, and are now trying to cover their asses from the higher ups in the company.

What's our move? I'm inclined to pay the original quote plus 10 percent. We aren't trying to start a war, we want to pay what's fair, but let's be honest. 6k to 16k is insane.

 

[rklopp]

On the one hand, it comes down to who has the best documentation or proof as to what exactly was authorized. On the other hand, you have a problem if you need them to come back and do a repair down the road and the line is down. On its face, the 10% premium over the original quote sounds reasonable, but you will need to think through the possible reactions from the dealer.

My employer provides professional services by the hour, and sometimes we blow by the original quote and the client complains when they get the bill. Sometimes we have paper that authorizes the overrun, and we get paid, and sometimes we don't and we eat the overrun. Obviously we try as hard as possible to avoid the latter by getting written authorization before we do additional work beyond the quote.

 

[gregormarwick]

The original contract stated that they would seek approval for any works over the initial quoted value, right?

To your knowledge they did not seek such approval.

If you are confident that they cannot produce proof of approval from an executive employee, pay the quoted value* and not a penny more, and look for another vendor for this service.

*edit: on the proviso that the work they did do was to an acceptable standard.

 

[Chip Chester]

Change order or other document with your signature on it would be pretty standard for a $26,000 anything.

 

[IninefingersI]

If I have service techs onsite for 3 weeks, they better be building a machine from scratch. The thought that they would run up that kind of labor charges without documented approval seems a little out of the ordinary.

 

[mhajicek]

On its face, the 10% premium over the original quote sounds reasonable

$5,600 to $32,000 is a lot more than 10%.

 

[boosted]

This is really tough. As you know, you have to keep the service team happy. They can cost you a lot more money than the invoice if you have an emergency shutdown, and they move you to the back of the line. It doesn't matter what the legality or ethics are - if your priority is maintaining the relationship.

Did you wrangle in sales yet? Sales might be able to make it right by shifting costs internally, and keep your service crew happy. If the sales contact is a hothead though, they might just piss everybody off even more.

I think meeting them halfway on the invoice would be reasonable, but you can't meet them halfway on an 800% overrun.

 

[CITIZEN F16]

I would not pay them a penny more than the original quote since extra charges were not authorized. The lying about getting authorization is BS. I would not do business with them again. Sounds like they milked the clock, was anyone watching the techs? Not all factory techs are created equal, some are nothing but tail chasers working under the direction of a knowledgeable guy in the home office on a cell phone. I can't believe it sounds like some guys charged well over $100 an hour to do a lot of machine cleaning.

 

[dalmatiangirl61]

their estimate says 8-16 hours per machine,......................... I responded by telling him i work as a programmer for two companies, and was only at this location 4 days during the entire 2-3 week process.

How did 16 hours per machine become 2-3 weeks? After 4 days, you or someone else should have been questioning how much work was needed.

 

[BRIAN.T]

On the one hand, it comes down to who has the best documentation or proof as to what exactly was authorized. On the other hand, you have a problem if you need them to come back and do a repair down the road and the line is down. On its face, the 10% premium over the original quote sounds reasonable, but you will need to think through the possible reactions from the dealer.

My employer provides professional services by the hour, and sometimes we blow by the original quote and the client complains when they get the bill. Sometimes we have paper that authorizes the overrun, and we get paid, and sometimes we don't and we eat the overrun. Obviously we try as hard as possible to avoid the latter by getting written authorization before we do additional work beyond the quote.

They certainly didn't discuss anything with us prior to any overages. I'm digging through email correspondence to see if I missed any emails. But even if I did, I didn't agree to anything above the original quote. We will see how it plays out.

 

[BRIAN.T]

Change order or other document with your signature on it would be pretty standard for a $26,000 anything.

Definitely didn't sign anything, not even the original quote. But but I did happily agree to it via email.

 

[BRIAN.T]

This is really tough. As you know, you have to keep the service team happy. They can cost you a lot more money than the invoice if you have an emergency shutdown, and they move you to the back of the line. It doesn't matter what the legality or ethics are - if your priority is maintaining the relationship.

Did you wrangle in sales yet? Sales might be able to make it right by shifting costs internally, and keep your service crew happy. If the sales contact is a hothead though, they might just piss everybody off even more.

I think meeting them halfway on the invoice would be reasonable, but you can't meet them halfway on an 800% overrun.

True you do, but this feels more like extortion than "keeping them happy". Plus on the bright side, they don't sell these machines anymore, so we actually are moving our service to the manufacturer. So I'm not super worried about pissing them off, although I hate to do it. We typically dont burn bridges.

We may have to take this up the chain at the company to see what higher ups say. I think the paperwork says they'll be eating the cost.

 

[BRIAN.T]

How did 16 hours per machine become 2-3 weeks? After 4 days, you or someone else should have been questioning how much work was needed.

You're not wrong, we should have been more on top of it. However, I shouldn't have to babysit professionals. On an side note, they did bring in another gentleman for training for a few days here and there, I think the thought was that time was on them.

 

[Bondo]

I agree with what everyone is saying about 16 hrs vs 3 weeks. ANY reputable company would have started after a week into how and why this is going to take longer and sorry for the delay.

Now on my end as doing maintenance work for customers and getting work done for myself. If a company came in and did what they did, I would make them show documentation for every second that will correspond with our "camera system" to validate any overruns. After a few days of making them do paperwork, you will see how much they want to keep working for you anyways.

 

[Strostkovy]

They should have a pretty good itemized report for that extra order of magnitude they slapped on there.

 

[Tony Quiring]

Already covered, but adding a little bit.

First ask, show the authorization for going above quote.

Second ask, itemized statement for each machine, full detail showing component level, each specific part, process and charge.

Third ask, have them produce the document that specifies to same detail, what is included in the original quote.

There should be clear indication of what the additional charges are, things like finding a broken this or worn out that.

If there are not clear justifiable items on the bill then it is clear they either under-quoted or were under-qualified to do the work in usual time.

Since first ask was for who authorized additional work, they should be able to produce a supplemental quote showing the things added along with number called and name authorized.

Given nobody authorized the work, and you stated you will work with manufacturer for support (check with them to confirm other companies both can provide service and are trusted by manufacturer) one last ask...

Last ask. Can I walk you out to your car?

Sent from my SM-G781V using Tapatalk

 

[john.k]

I remember taking a complex hydraulic ram to a major hydraulic repairer,and getting a fixed ,written contract for $2700......I said to the workshop manager there was no way they could fix the ram for that price ,it would be more like double.....The workshop manager gave me the evil eye,and the Im a qualified engineer,whereas you are an insignificant reptile speech.....I put all my opinions in writing to my manager ,and sure enough,a week ,later my manager gets the first crying phonecall about how the ram is going to cost $7000 when finished ,and thats at their cost,no profit margin......so,I go over ,pick it up,and reinstall it .....then the bill comes ,its $12000.....but it was well done,so I took an identical ram over a week later .....the engineer says "what do you think this one should cost...I says $5000....he says OK ...well do it for that.......seems the reptile(me) knew more than he did.

 

[pcasanova]

whats the owners stance? I have a service tech out right now that were at 3 weeks but I knew that going into the job and the food chain knew about it, except the general manager who freaked a bit when he saw the tech here 2 weeks in a tripped a bit. so didn't anyone else at the shop ask what was going on or knew about it?

 

[Scottl]

The original contract stated that they would seek approval for any works over the initial quoted value, right?

To your knowledge they did not seek such approval.

If you are confident that they cannot produce proof of approval from an executive employee, pay the quoted value* and not a penny more, and look for another vendor for this service.

*edit: on the proviso that the work they did do was to an acceptable standard.

Exactly, and the authorization for the additional work should be in writing and signed by an authorized representative of the client company. Verbal authorization for charges more than 5-1/2 times the written estimate? Would never hold up in court, arbitration, or any other legal recourse venue.

 

[CITIZEN F16]

Definitely keep us posted as to the outcome.