3 year contract price increase annually?

[Jared]

We were just awarded a sizeable contract. In the award we were notofied that it is for 3 years. Has anyone written in a 5% increase annually to cover fuel and inflation? Any recommendations?

 

[Tony Shelton]

Depending on the customer your RFP may have a built in max increase. We've got quite a few that have a 5% or so increase as acceptable. Some of them call us near the end of each year to see if there will be any increases for the coming year. Check the RFP first.

If it's not there, you might want to write it into your contract and see if they balk at it. You can always remove it if you have to.

 

[smkservices]

Tony, I would like to get a copy of a contract that you use if you are willing to share. You can send it to my email chris@smkservices.net

 

[Jared]

Thanks Tony. I will check and as you said if we need to put it in we can always retract if needed.

 

[Paul Kassander]

Way to go Jared let us know how it works out.

 

[Doug Rucker]

U da man

Sent from my SPH-D700 using Tapatalk

 

[IndyExterior]

Just curious what type of contract is awarded that you can change the terms of after it's "awarded". If so why is a contract needed?

 

[Tony Shelton]

Some companies (like utilities, government buildings, etc) we do 3-5 yr contracts with couldn't care less about our contract. WE have to sign THEIRS. A good portion of them have a "built-in" potential for annual increase up to "x" percent.

 

[Jared]

The contract expanded from one year to three. We were awarded the contract annually and then we were notified afterwards that it would be extended to 3 years! It is for a large PM. We are doing their flat work in PA, DE, and NJ. It looks like we can do a 3% increase without it being an issue. Spring is starting well.