Risk Fee ?
Key client gives me lots of sub contracts.
They provide a material for a job- I do the contract with this material which subsequently fails.
The job now needs 30 hours to remove old material and replace.
We are all friends here but this is business.
Would any of you just eat it and move on?
Claim it’s not my damn problem and bill out for remediation?
Something in between?
Edit- this job was relatively small.
A larger job of this type could have run to weeks of labor to remedy.
I guess I need to get this straight with client as there could be other failures on larger jobs come home to roost..
In this case - you say that you are not at fault in any way, and that it is not the customer's fault as well really, just a Shiite Happens thing.
Well, knowing that Shiite happens now and aggin, I like to think that some of that risk shows up in the price that you or your customer charge for the project as a whole. And then - who-ever is holding that risk fee is who should be ponying up for this issue when it happens.
My example is that I hate to doo work on customer supplied material.
This mostly is an issue when I need to doo $500 work to a $1500 pc of material.
All of me wants to not touch it. But what doo you doo if it's a good customer?
In this case - I have told the other guy that :
"I doo make mistakes from time to time, and lose the material. By you supplyiing the material I am not able to add in a risk fee, and thus, it may cost you another pc of material."
It is understood, and that risk is now on him.
Not that I can think of a time that _ that has happened yet* - fortunately, but it's not like I've never blown out a $1500 (or more) chunk of material before.
It happens. At least to me....
Now this example isn't the same as in your case where the chunk of steel was cracked, and didn't find it until finish passes (just example) but it still goes to show the fact that someone is, or should be holding the WIP Risk Fee.
On the other hand, I have made a batch of $1000 parts, only to find out a month later that the material supplied (by the customer) was wrong, and I was paid to re-make the parts. But I guess in this case - the parts were all completed, not issue found WIP, but still .... ???
* "that" being that I lost a pc of material of much higher value than the machine work on customer supplied material.
I usually won't quote a job for less than 2x the material cost, unless it is super low risk work.
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