Date: Sat, 17 Feb 2001 13:54:25 +1100
Subject: Re: What would you do?
From: "DON DIXON <dond@bizballoons.com.au>" <dond@bizballoons.com.au>
To: Melanie Binkley <applause2x@earthlink.net>,

G'Day from Downunder,
This reply is NOT to be relayed to the party with whom you have a dispute!
It is intended as suggested advice based on your side of the dispute only.

> You are sub-contracting another "CBA" to execute your specific design at a
> remote location.
You are BOTH CBAs and therefore should have had the sense to have something
agreed IN WRITING beforehand. (with signatures) Remember Exam #5?

> They quote you the price they will charge you do it INCLUDING labor and
> delivery.
Was their quote "lump sum" including labour? Or, based on an estimate number
of hour at an hourly "charge out rate"? I ASSUME lump sum.?.?.?
 
> Your sub-contractor calls back and leaves a message that they are hiring an
> additional crew member to make sure they can complete the job at the
> specific time....(they leave you a message...you have not authorized the
> addition.)
To me ..... the message is a "commercial decision" made by the subcontractor
to meet their obligation to you (the head contractor). Whether they use one
person or 15 people to meet their obligation is THEIR decision and I would
assume the message was left only as logistics advice or a courtesy.

> BEFORE THEY SUBMIT THEIR BID that they will have to special order 2 types of
> balloons at express delivery rates.
Again, if a "lump sum" price submitted, any additional costs incurred by the
subcontractor to source the product specified is THEIR responsibility and
liability.

> Sub-Contactor's bill and it has risen not only the $ c-shells for the extra
> employee but that amount has been TRIPLED for their underestimated labor
> time. You correspond back that these expenses are: a) unauthorized
OK.

> b) their total labor charges are more than yours to do 1/3 of the amount
Not relevant! You accepted their original price....... PERIOD! End of story!
> 
> c) They (Sub-Contractor) states that they have "been more than gracious..."
> in that they have not passed on the $ c-shells (less than $ 10.00 folks)
> cost of having the stock shipped.  AND they have not charged you for the
> "special delivery (less than $ 10.00) of helium to blow 170-11" balloons.
Not relevant! You accepted their original price....... PERIOD! End of story!
 
> Curious, as a CBA, how do not have that much helium on hand when you say
> that you have been running your own business as your primary income for 9
> years? peculiar? who knows?)
Not relevant! You accepted their original price....... PERIOD! End of story!
> 
> d) They bill you for the cost of the product ON TOP of what they quoted they
> would do the entire job for which was inclusive of materials.
Not relevant! You accepted their original price....... PERIOD! End of story!
> 
> So all in all they said they would do the job for $ c-shells and now with 9
> years experience they say they underbid their time and expenses and want you
> to pay and additional $ 150.00 over their bid.
Not relevant! You accepted their original price....... PERIOD! End of story!

> what would YOU do? Interested in hearing from you all....
I would consider one of 2 options;
1] The hard line ..... Send a cheque immediately for the originally agreed
amount with a letter stating the additional charges are unacceptable as your
understanding was for a LUMP SUM agreed amount for the job including all
labour and materials as specified in your fax dated ........ The ball is now
back in their court for them to consider the cost of possible litigation.

2] "Bending" (a little) .... because you realise that YOU as a CBA and head
contractor should have eliminated the risk of dispute with a written
agreement. Pay the originally agreed amount + HALF the extra over claim with
a letter of extreme disappointment in your "colleague" for reneging on the
original deal.  

Think hard before you act and then don't waver from your decision. This is
BUSINESS! You must TRY to eliminate your personal feelings and emotions from
this business decision. At the end of the day, BUSINESS ETHICS must prevail!
Good luck Melanie.

Don & Dolly Dixon  CBAs
Business of Balloons Group of Companies.
Sydney - AUSTRALIA
http://www.bizballoons.com.au
http://www.celebrating.com.au
http://www.eballoons.com.au
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