My Contractor Wants to Use My Backhoe

[CurlyDave]

We are in the process of building a house, and my contractor has asked if he can use my backhoe on the house.

He has his own skid steer, but this is not his only project. He feels that this will be a cost savings to me, since the backhoe is already on-site and that I will only have to pay for the time to do a few minor jobs, rather than the time to truck in an "outside" piece of equipment and an operator for it, the time for the job, and the time to take it back.

I think he is correct on this and he has been honest in his billing so far, so I am inclined to give him a key and let him use it.

Are there any downsides or potential pitfalls I am not seeing?

Remember, I am paying for every hour of time spent on this project, one way or another, and if I can shave a few hours a week off, it may add up to a few thousand $ over the course of a few months.

This is not like lending him a racing Ferrari -- JD backhoes last for thousands of hours in rental service, and I don't see a good way to permanently harm it. Am I missing something?

 

[DUMBDOG]

I have a neighbor getting into contracting and letting him lease my backhoe so much per hour. The bad thing is that it is just at the right age where everything is going wrong. Since he has been using it, the radiator went out, the alternator, front joints, the clutch disc's to operate the front wheel drive, one tire plus the engagement hub for one of the rear wheels. The parts alone would have been in excess of four thousand, my total so far has been 2600 and no labor cost. I still will collect about 1400 in fees above and beyond the parts cost. The guy is a real mechanical whiz. Normally the rear wheel engagement would have involved replacing the axle assembly, his cousin has a machine shop and they built up the rear end, and then honed it down, this alone was a savings of over 1500.

Not that he is hard on it, it was just at that age. He will not charge any labor on any of the repairs, so it is a win win transaction for me. I normally under use the machine with twenty to thirty hours per year and this year he has put on over 200. The reason for the extensive hours on a house build is a lot of dirt had to be dug up and moved in to meet the floor plain. The machine now has about 6700 hours on it.

Once my projects are done, the machine will be sold.

 

[Thomas]

Morning Dave.
By the sounds your gut feeling are saying go for it.
I would toss him the keys w/the understanding only he shall be operating the backhoe,also drop strong hint that your backhoe your pride and joy.

 

[1bush2hog]

As long as you are comfortable with the fact that alot of subs will not treat your equipment the same way as you do then go for it. Then again maybe you will have better luck.

If it can be broken - it will be broken, and who pays for that?

I think I would try to be around to supervise, if you do loan it.

In the course of our new garage construction, I have loaned out: shovels, halogen work lights, skill saw, brooms, etc. ALL are now in need of repair. Workers used my new wheel barrow without my knowledge and broke the poly tub on it. Found and used my 2 cycle gas mix in their gas generator

I learned to keep my stuff put up -

 

[dmccarty]

Is HE, the GC, going to be using the BH or someone he has hired?

If you trust the GC and he is the only person that will use the equipment, then, well, maybe it would be ok.

Our GC has one guy they use that they can trust with money, tools and kids. One. They have had their garage broken into by a worker for one of the subs they have use for years. The guy needed money, asked for work, they had him clean up the garage. A few days later two high end Husky chainsaws had walked away. One of the saws was the second biggest one that Husky makes.

You will not often here our builder talk bad about anyone but I heard him numerous times talk about tools walking away or getting busted. Many of the workers just don't give a dang.

Later,
Dan

 

[stumpfield]

Makes perfect sense to me. Since it only be used exclusively on your building project, I don't see why not if it's the right tool for the job.

 

[WhyNot]

Dave, If your job is a t&m job then I say go for it but if you have recieved a bid from the contractor to build the house the contractor should have included the cost of the equip. and hauling into his bid. If this is the case you would be paying for equip that is being used some where else and putting wear and tear on your own backhoe. That said I don't see a problem in letting him use it just charge him $30-$40 an hour for the use of the backhoe and take the cost off the final bill. But I'm sure there are ways for the contractor to recoup the "rental" fee. (not saying your's will)

 

[AlanB]

I would just be real explicet in exactly WHO could operate it. You may find that his idea of who is acceptable, and your's are not the same. Better to work those things out up front to avoid big hassles later.

And work out (or just plan on paying for it yourself) who fixes it when it breaks (and it will)

Before you lend it, think about how pissed you will be when they tell you they tore something up and you need to get it fixed. If it is all part of the deal for you, I would say go ahead, if it will piss you off to know end, I would just pay them to run their equipment.

 

[heehaw]

people treat equipment different: is exactly why i don't loan anything that has a motor on it: i will use it for people, but i do all the operating: had a friend borrow a truck from another friend a couple years ago, for a 30 minute job: the alternator went out, and the truck owner got all hot and bothered because he didn't put a new alternator on..they don't speak now, so i just use my equipment myself, and if it breaks or i break it, i fix it...that way there are no chances of hard feelings. if at all possible, i would operate the BH for the contractor, or be really specific about who was going to operate it.
heehaw

 

[CurlyDave]

Dave, If your job is a t&m job then I say go for it but if you have recieved a bid from the contractor to build the house the contractor should have included the cost of the equip. and hauling into his bid.

Actually, my contractor is working on the basis of what he calls a "fee build".

We started by estimating the total cost to build my house and he then added what we both thought was about 14%. This is now his firm fixed price bid to act as a GC on the build of my house. If cost increases, his fee does not, but he does pass through the total cost of labor & materials on the house. The subs are mostly T & M, but some have made firm bids.

The 14% is a bit high, but he was/is highly recommended as a high-end home builder. As it turns out, when we started getting bids, the cost of the house went up by about 20%, so he is down to about an 11% fee. This cost increase was not his fault, it was caused by us vastly underestimating some of the site prep. This is what I call "view property" -- we have a 30 to 40 mile view over about 200 degrees of azimuth. Both country landscape and city lights. I own the property below us on the mountain, so no one can ever block the view.

I could have wimped out and built at a lower elevation on the property, but this would have left its potential unrealized forever. The house would be too nice to tear down and start over, but in a less-than-optimum location.

Anyway, if the GC needs a short trench, he can legitimately either call in a backhoe & operator, costing me $250-300 for an hour of work, or he can use my machine, costing me only wear, fuel and his labor time. His fixed fee is for supervision only, if he does any of the actual build, he charges me $35/hour for his time, which I consider very, very reasonable. Of course any T & M subcontractor on the job site at the time, stands around sucking his thumb & billing me for time while they wait for the outside backhoe to arrive...

As I see it, my incentive is to smooth the way as much as possible for the job to run fast & easy. This was one of the attractive features about the fee build concept. My interest is very closely aligned with the GC's interests. If the job goes fast & easy, he gets more $/hr. If he screws up & it takes longer and costs more than anticipated, he doesn't get any additional money, he only gets to spend more time on it for no reward.