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Northrop Grumman Corporation Message Board

  • bhenning32 bhenning32 Nov 2, 2010 10:39 AM Flag

    General Contractor

    What if you hired a General Contractor to build you a 4,000Square Foot Home. The Bid he came up with and you signed and accepted was for $472,000. Six months in your GC tells you he`s running into a few snags that are out of his control and there would be some extra costs also out of his control. You anticipated this and set aside 10% or an additional $47,000 and your dream home continues. More time passes and he comes back to you with the same tired story. At what point do you tell the contractor You have gone as far down this path as you intend to go and make a decision to Eitherfile a law suit and Ruin the Company or pull all future orders unless they finish the project on their dime.

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    • Why would you give a contract to a builder, yet anticipate a cost overrun? If there are no builders to pick from that do not have a cost overrun history, then you should only fund work as it progresses ( i.e time & materials) and be prepared to stop work and renegotiate the contract or open the bidding again. If the contract is fixed price, the builder should estimate the cost of the unexpected (risk) and increase the bid. Now if you go with the lowest bidder... do not be surprised at the outcome.

      • 1 Reply to one_aardvark
      • Why would you give a contract to a builder, yet anticipate a cost overrun? If there are no builders to pick from that do not have a cost overrun history, then you should only fund work as it progresses ( i.e time & materials) and be prepared to stop work and renegotiate the contract or open the bidding again. If the contract is fixed price, the builder should estimate the cost of the unexpected (risk) and increase the bid. Now if you go with the lowest bidder... do not be surprised at the outcome.


        Great answer, That I can understand, Thanks.

    • your posting is rubblish, showing your ignorance on DoD contract. Delay & cost overrun can lead to contract cancellation. The problems with DoD contract come from changes in customer(government) requirements made by customer in middle of design cycle AND cost-plus-incentive rather than fixed cost type of contract.

      • 2 Replies to noc_dtn
      • BULL! under bidding is common, you can't blame all overruns on the customer, that's ridiculous to say.

      • your posting is rubblish, showing your ignorance on DoD contract. Delay & cost overrun can lead to contract cancellation. The problems with DoD contract come from changes in customer(government) requirements made by customer in middle of design cycle AND cost-plus-incentive rather than fixed cost type of contract.

        Thanks, I appreciate your thoughtfull, and masterfully worded reply. I didn`t realize I was in the company of such Genius. Perhaps NOC could hire you as A PR Guy/ Cheerleader to help us non militart contract lay people better understant the finer points of intentional cost over runs and out right Lies and double dealing on the Contractors part. And maybe you could get a second job investigating why the Politicians turn a blind eye to the entire contract re cost overuns. Sorry but your original answer was BS, the politicians in charge of defense contracts and it funding are cronies of the EX POLITICIANS Who now are employed at LMT, RTN, NOC,GD and the rest of the contractors.You are great with the finer points of the contract system but the Bigger Picture That the entire process is Corrupt to its Core, and to defent the Process makes you both Republican and Slow.

 
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