Material failure in sub contract- who eats it?
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  1. #1
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    Default Material failure in sub contract- who eats it?

    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..

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    What kind of material for my own curiosity?

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    A sealant used in a assembly.
    We (I), got caught in a documented batch failure of this sealant.

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    I would get it clear from them that this is not your responsibility in any way, preferably in writing

    Then, assuming your comment that it is small means you don't care about the cost of rework, fix it as a favor to a friend.

    Then I would be more careful about the material they are providing in the future

    Good business is not always about getting every dime due, but about ensuring that those dimes keep coming.

    The admission of responsibility is to prevent future repercussions, like failure on a large expensive job.

    The fixing it on your [small] dime is to keep those dimes coming

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    You put that very well Gus.
    That is my instinct.
    There are many aspects of being a valued sub- one being capable of resolving problems effectively.
    I just don’t want to be foolish in my business dealings.

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    If you want to not charge them for it, I would talk to the customer first. I would consider invoicing them so they can go to the person they bought it from and try to get some compensation. If that doesn't work, then you could write it off. Not billing them at all will make it harder for them to get anything from upstream.

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    Daniel makes an interesting point, one way to handle it is to invoice the amount it costs to repair and then zero out the invoice, this assures that the customer knows there is a cost to the thing.

    It really depends on the relationship, but I don't see much of a downside to this idea and it is similar to advice I give to other small businesses about keeping the customer informed of the costs of changes etc

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    Thanks- I do anticipate a defensive posture.
    “You specified the product therefore it is your liability”.
    I have several people I deal with here- some a bit hard-nosed.

    I will have to do something to protect myself from another problem of this sort.

    In this case it is not appropriate to cite statute but this must be a well established element of contract law.
    I would like to be informed as to who specifically are the holders of liability here.

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    I would pressure the client to make a claim for costs and replacement against the supplier.And make sure you have some input ,just so you know exactly whats going on........most material suppliers bend over backward to correct legitimate situations.....the guys I was working for would pocket compensation money and not forward a penny to the subbie ,and also deny it,if asked.

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    Use it as a learning event.

    Have a conversation with your customer and get this event fixed.

    Use it to create official policy that clearly defines how these types of issues are handled going forward.

    Specific language identifying things like liability and recovery cost for corrections such as this.

    Be careful as this effects the materials and parts you make or supply too.

    Sent from my SAMSUNG-SM-G930A using Tapatalk

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    In the auto repair biz, if you bring your parts to be installed the mechanic will not guarantee any part of the work.

    I have owned a series of old, dragged out of the weeds work trucks that I mostly did all the repair and maintenance myself. If I had work done and would use a junk yard or new part, I would have the mechanic get the part so to avoid the the part was bad - the installation was not right discussion.

    Paul

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    Default Risk Fee ?

    Quote Originally Posted by Trboatworks View Post
    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.



    -----------------------

    Think Snow Eh!
    Ox
    Last edited by Ox; 04-27-2019 at 12:05 PM.

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    TRBoatworks said
    "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"

    then
    "Thanks- I do anticipate a defensive posture.
    “You specified the product therefore it is your liability”."

    Just for the sake of clarity, did the customer physically supply the material in question, or did they specify the material to be used (and provided by you)? I see those 2 situations as completely different.

    One might assume that if actual material is physically supplied by customer for use, then customer has "guaranteed" quality of material as suitable for use in his work. OTOH, if they have only specified material to be used (like any typical job shop customer), the onus is on the shop to check raw materials prior to beginning work. All this is pretty obvious, it was just the phrasing in the two quotes above that puzzled me.

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    If this is a "documented batch failure of the sealant product" then whoever MANUFACTURED the product has already accepted liability, time for a conference with all parties to put this rightin a timely and expedient manner which satisfies the needs of all involved and move on to happier and more profitable times! Entering into a blame game will sour all future deals and profits!

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    Step 1 is figuring out what the material manufacturer covers.
    Sealant biz ain't quite like the metal biz. Mostly if they cater to consumer products, warranty etc, which we don't get.

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    Quote Originally Posted by hermetic View Post
    If this is a "documented batch failure of the sealant product" then whoever MANUFACTURED the product has already accepted liability, time for a conference with all parties to put this rightin a timely and expedient manner which satisfies the needs of all involved and move on to happier and more profitable times! Entering into a blame game will sour all future deals and profits!
    Look at the fine print on every container of sealant, paint, glue or whatever. Manufacturers only liability is to replace whatever product is proven defective. No liability is accepted for incidental or consequential damages. So put that one in your pipe and smoke it!

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    Vape maybe?


    -----------------

    Think Snow Eh!
    Ox

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    I specified the material.
    It was purchased and delivered to me for the contract by general.

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    You specified the material, its between you and the sealant manufacturer. Period.

    Tom

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    I don’t agree.

    Can you cite statutes or case law?


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