Quoted price for a job increased since agreeing to get work done - are we committed?

sghughes42

We had a quote earlier on this year for some work on the house. We agreed this and booked the work in for later this year.

The contractor was struggling to get some of the materials and had to go to a different supplier to secure them, after discussing various options with us. As part of this we decided not to do certain elements of the work to reduce the cost, elements which they previously estimated would add around £2000 to the bill. They sent a revised quote over but to our surprise, rather than the price going down, it has actually increased by £2500, so in effect an overall increase of over £4000 from what was originally quoted and discussed.

At this point we decided it wasn't worth getting the work done with such a significant increase (approx. 50% of what was originally quoted) and told them this. They have come back saying they have already ordered materials, and that as they weren't using their normal supplier, they've have had to pay up front for them.

Does this put us under any obligation to carry on with the work? My gut instinct says no - they paid money before we agreed to a higher price and by discussing removing certain items from the job they were aware we wanted to get costs down. If they have already ordered and paid for the material they must have done so before preparing the revised quote - as soon as we received this we expressed reservations at the cost.

I don't want to cause problems for a small contractor, but I'm also not happy that they are forcing us to spend money we don't actually have (due to the price increase) to do this job. While I know material prices have gone up, a 50% increase in the cost when a lot of the job would be labour seems unlikely, and again surely this should have been run past us before any money was laid out?

prowla

Was it a quote or an estimate?

I think the prices of materials have gone up hugely, but I don't see why labour rates should've; of course there could be more labour required.

TELLIT01

Assuming you haven't agreed to the increased cost, the problem is entirely for the contractor to sort out.  He should have spoken to you, and had the increased price agreed, before ordering the materials.  If you cancel he will be able to use the materials elsewhere so I wouldn't worry about cancelling.

We are planning work in our garden which will require a lot of timber.  We know prices of that are increasing all the time.  The contractors have told us the current price of the timber and we have agreed to cover any additional cost as the work won't be done for a few months.  The labour cost is already fixed.

sghughes42

prowla said:

Was it a quote or an estimate?

I think the prices of materials have gone up hugely, but I don't see why labour rates should've; of course there could be more labour required.

It does say quote, however we did ask for this to be revised (parts of the job removed with the aim of saving money) so they could argue the previous quote no longer holds.

The new price is £1k more than the previous quote we accepted, but for a lot less work. Even if it had been a £1k increase based on getting everything done that seems a lot (nearly 10% of the total) in four months.

sghughes42

TELLIT01 said:

Assuming you haven't agreed to the increased cost, the problem is entirely for the contractor to sort out.  He should have spoken to you, and had the increased price agreed, before ordering the materials.  If you cancel he will be able to use the materials elsewhere so I wouldn't worry about cancelling.

Definitely not agreed - we'd actually advised them we were looking for ways to reduce the cost.

I wonder if he's had a few customers cancel and is trying to salvage business. He contacted us a few weeks back to check we were going ahead, we confirmed we'd like to but that we were considering getting less done so could he re-quote on that basis. Then he phoned us at the weekend with a technical question - I was driving at the time so asked him to put it in an email so I could understand what he was asking and get back to him. He sent that detail and a revised quote over, within a few hours of getting the quote we messaged him to say the increase wasn't acceptable but it seems he'd already ordered the material by then. It was probably done with good intentions, to secure them for the job, but as discussions leading up to that point had been around ways to reduce the cost I can't see why he'd not want to run such a big rise past us first or not think it might make us change our mind.

Unless, of course, it's a tactic to try and stop us from cancelling - in which case he's chosen the wrong approach in this case.

As it's still two months until the job is being started and he's only secured some of the materials there seems a good chance it would go up further still if we did carry on, which would mean us having to borrow money to cover the cost, nevermind the fact it wouldn't make sense to get the job done at the higher price anyway.

Doozergirl

What are these materials? 

twopenny

Less work = less materials, less labour
So even if the materials have gone up the situation doesn't add up.
While he may have purchased the materials before acceptance of a further price rise it seems he's hoping to put you in a corner as you now need to find someone else and start again with longer waiting time.
Has he given a breakdown of the increased cost? I'd ask for one. It maybe something he doesn't want to do and give you further reason not to go ahead.
Though a simple 'we don't have that money' puts an end to the discussion.

sghughes42

Doozergirl said:

What are these materials? 

I'm reluctant to go in to too much detail here as you never know if the tradeperson in question might frequent these forums.

One material is timber which I know has gone up, however that is not the main cost in this case.

sghughes42

twopenny said:

Less work = less materials, less labour
So even if the materials have gone up the situation doesn't add up.
While he may have purchased the materials before acceptance of a further price rise it seems he's hoping to put you in a corner as you now need to find someone else and start again with longer waiting time.
Has he given a breakdown of the increased cost? I'd ask for one. It maybe something he doesn't want to do and give you further reason not to go ahead.
Though a simple 'we don't have that money' puts an end to the discussion.

In this case we wouldn't look elsewhere, we'd just pospone the job. It's not urgent so we'd rather wait until things settle down in regards to materials pricing etc.

No breakdown at all. He suggested timber had gone up 40% which it likely has, but nothing else. It may well be that prices have gone up, they have in my line of work, but I'd not take an order then pay for parts that would put that order at a loss unless the customer agreed to an increase first.

NSG666

If you are adamant that you have not given the go ahead then just send an email saying thank you but you are not wanting to proceed. That way, both you and the contractor have a written record of where things stand vs any verbal records.

plumb1_2

Everything has gone up, materials, labour, fuel etc
why don’t you get another builder to quote for the job and then you can compare the 2.
If he’s paid for the materials, as for copy of invoice and have him deliver it to you and just pay for it, as you will need it if your gonna get some other builder, as price of materials is not going to drop.