Machine shop over ran quote
Machine shop over ran quote
(OP)
If a machine shop completely blows by their quote for a widget, would you as the customer, pay the additional amount? I'm leaving this rather open ended for now, to see what the concensus is. I'll fill in the details later.





RE: Machine shop over ran quote
If it were an estimate, pay up and chalk this up to experience.
If it were a fixed price offer, $XXX to make this part, then you should not pay a penny more than the quoted price unless something changed between bid and completion.
RE: Machine shop over ran quote
Now, if the information they had was incomplete, or there was an error, or there was some 'discovery'/R&D involved... then there's arguably room for negotiation that it's fair I pay them a bit more.
If they are a company you want to keep a good relationship with, you might consider paying more, perhaps split the difference or something.
However, I don't believe you'd be legally, morally or ethically obliged to do so.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Machine shop over ran quote
If it was your mistake, pay it.
If it is somewhere in between, negotiate.
Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask
RE: Machine shop over ran quote
RE: Machine shop over ran quote
Unless, like I said, it's in your long term interests to have a good relationship with them.
Not sure about the 'Structural' world but places I've worked didn't normally think any overage as reasonable on a fixed price order.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Machine shop over ran quote
Do you feel that they lowballed to get the bid?
Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask
RE: Machine shop over ran quote
A quote is an offer to provide something for the price quoted. In court it would probably be upheld as a contract.
If a significant time went by between quote and authorization to manufacture, or some external factor outside of the vendor's control occurred, such as a drastic and unanticipated change in raw material costs, then there are reasons to negotiate.
RE: Machine shop over ran quote
Quotations are understood to be fixed price. ... but most supplier quote documents have boilerplate, front or back, about things that are beyond their control, like supplier surcharges, design changes, all that stuff.
I like to develop long term relationships with vendors. Not involving reverse cash flows or favors or anything like that. I just tend to issue RFQs for non-commodity items to people with whom I have done business before, and had satisfactory results. That way, if a quote comes in higher than I expected, we can work together, over the phone or by email, to adjust the design so as to make everyone happy. Establishing that level of rapport, and the necessary common vocabulary, usually requires meeting in person at least once. That works better if it's not a social meeting, but a shop visit to hammer on an actual problem.
Pay the vendor. If it leaves a bad taste in your mouth, don't call him again. Maybe you could get lawyers involved, or cause him to do so, but you'd just end up paying lawyers, and being distracted from what you're really trying to do.
Mike Halloran
Pembroke Pines, FL, USA
RE: Machine shop over ran quote
I work for a large aerospace company and the machine shop is a group within the company but they are based in an "emerging market" south of the border (SOTB). They have to bid for our machine shop work along with local vendors.
This is a new business that the company spent lots of money on and management is compelling us to send work there in order to justify their existence. Nevermind that we can get work done locally for about half the price.
Yes, I do think they under bid the job so they can get it. In fact, my first quote was higher than local but management wanted to see if the SOTB shop could match it and of course they did...until now.
The point of my original post is that the competition for the SOTB shop is local vendors who will stand by their original quotes. In my view, the SOTB shop should do the same.
RE: Machine shop over ran quote
You're not dealing in a free market; you're saddled with a captive shop.
Taking a hard line with a captive shop is going to rock someone's boat.
It's a career decision....
Mike Halloran
Pembroke Pines, FL, USA
RE: Machine shop over ran quote
So, is it in your long term interest?
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Machine shop over ran quote
* Except that they will have no accountability for errors or cost over-runs - you will have to pay for those.
RE: Machine shop over ran quote
RE: Machine shop over ran quote
Ultimately, it's your customers that will pick up the bill for this. This is uncompetitive practice and we all know where that can lead to in this day and age....
RE: Machine shop over ran quote
That's verging on dishonest, just taking advantage of the 'special relationship'.
As you say, the decision is out of your hands, but we all know what the decision should have been.
RE: Machine shop over ran quote
SOTB in "emerging market" can cost higher than work done in USA.
As you said their first quote was almost double price (!)than local USA vendors and then they probably underbid after the managements guidance.
I should expect that due to lower labour cost the SOTB work should be cheaper.
Possibly transport cost elevates the total price?
(if the "emerging" is e.g. Brazil)
Anyway, a fixed quote is usually "firm" but in this case the underbiding explains all..
RE: Machine shop over ran quote
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Machine shop over ran quote
Ultimately, everybody who buys a plane ticket picks up the tab.
RE: Machine shop over ran quote
RE: Machine shop over ran quote