Contracts T&M vs. Firm Price??

mpyoung1292

mpyoung1292

Location
Rapid City, SD
Does anyone have any input or thoughts regarding whether a T&M contract is better than a Firm Price contract? A few people I've talked to said that if the utility is not yet on a trim cycle or if the contractor is new to the system, then a T&M contract is best. If the system is on cycle & the contractors are not new, then a Firm Price contract is better. Is there any statistics or opinions on the subject?
 
I seem to make more money (as a general rule) with a firm price, although I dont do commercial utility work. T&M typically saves the customer 20-30%, but, it requires I work the same both ways.
 
[ QUOTE ]
A few people I've talked to said that if the utility is not yet on a trim cycle or if the contractor is new to the system, then a T&M contract is best. If the system is on cycle & the contractors are not new, then a Firm Price contract is better.

[/ QUOTE ]

I agree with the latter.

I probably agree with the first also. If the cycle is new you will probably get tons of complaints and legal battles not to mention slowing the contractor down. If the contractor is new to the system you will probably have to deal with spec issues and skips.

On a firm price contract the most common problem is clear definitions and communication of the specs.

T&M is more common for backlot high-end neighborhoods and burning lines. Danger trees also.


Mike
 
With PG&E we had unit pricing for prunes and removals under 24", above 24" and depending on the complexity of the removal it was decided if it was T&M or regular unit. Here on the utility I work at now, the system was not well pruned in the past and it we have been using T&M. Even now we do T&M but we only have in house crews in this area. I do agree that T&M is best used for complex/large/hazadous removals with the rest going to fixed unit for the client.
 
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