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Project over runs by 75% ... how do I charge 75% more..

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Mark Burnstien
Project over runs by 75% ... how do I charge 75% more..
on Jul 2, 2009 at 9:10:01 pm

I posted the question about project file handover - but now the tale has taken another twist...


First up the AE project dilemma hurdle has been crossed I didn't give them the project files and they accepted that.

Here's problemo number two.

At the beginning of the project I had to quote for a two minute film. The script was never two minutes despite the director saying he would get around to editing shorter it always read at 3.30 I was told to continue with a story board which in order to get every image to read on the time line ended up being 3.30 All the way along the director said I know this is the wrong way to work - but I want to put the voice to your picture.

No I have purchase order* on with a 2 minute duration.

They have made a 3.5 minute film which they expressly asked me to make.

Now I have to deliver so I say I want to have a written promise that they will undertake to pay for the additional work.

The director is saying well the CEO is paying for it and the budget was set at..X and I am saying well I need X plus 75% for the additional time taken to create the additional minutes. The director is saying I will get you more money ..... wait for it .... on the next project.

Using your combined wisdom and tact and considerable wit - how do I tackle this one - bearing in mind I am supposed to be delivering the finished movie tomorrow.

*I'm in the UK - that'a a legal doc specifying the project details


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Tim Baker
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 2:13:23 am

Always...always...always...have an "out of scope" clause of some kind in an agreement or contract. You have got to allow for client stupidity.

Every project I do is left open ended via an "out of scope" clause that states that if the price is X given Y, but if there are over runs due to a, b, c, or d...the price will be adjusted to Z and is due before final delivery.

You may be stuck on this one...not sure of UK law...but the old...I'll catch you next time...never happens. Remember...tomorrow never comes!

Tim Baker

Chameleon Mobile Video Productions

(239)849-3295

"It is not the light at the end of the tunnel that we should seek...it is the courage to take the next step in the dark that we must find."


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Mark Burnstien
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 12:30:11 pm

I do have an "out of scope" line - but not detailed. I live and learn.


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Tim Baker
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 1:50:41 pm

Then if you have an out of scope...I would think you are covered...notate the cause for the overruns...attach any emails you sent to or correspondents from client(always save any of this...I have every email that I send to and get from clients) and submit the appropriate bill.

If nothing else it will allow the CEO and anyone else concerned to see that you were concerned about the overruns from the beginning, but in good faith went ahead and did the work. And it will bring to light the ineptitude of the guy you actually had to work with...

Once you substantiate everything...back it up with documentation and the "out of scope" I'd say you are setting pretty good.

I'd go for a revised invoice and get your money.

Tim Baker

Chameleon Mobile Video Productions

(239)849-3295

"It is not the light at the end of the tunnel that we should seek...it is the courage to take the next step in the dark that we must find."


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grinner hester
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 2:14:34 pm

You know you won't get it next time and of course, nobody can add 75 percent to their bid just because they made a msitake bidding it. Eat it. Pretend to be happy about it if you want more work from them.



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Mark Raudonis
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 3:08:10 pm

75% longer in running time does NOT equate to a 75% higher bill. Yes, you've spent more time on it than
planned, but if it's 75% more time.... why weren't you addressing this the minute you went over schedule?

The "overage" clause in your contract should have been triggered the minute you felt that this was going
wildly out of control. To whine about it now is both unprofessional, and probably unproductive. You're going to piss off the client, because they'll be shocked by an unexpected bill, and you will waste your time pursuing money that you'll probably never see.

Finally, maybe the running time really doesn't matter. If it's NOT for broadcast, then the exact running time may be irrelevant and the client might be happy with what they've got. You're the one that's been
screwed because you didn't speak up in a timely manner.

It's called "Show Business". Time to start paying attention to the "business" part.

Mark



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Ron Lindeboom
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 5:31:35 pm

Fabulous advice, Mark.

Over my lifetime I have had to eat a bunch of things where I could really only blame myself for the way that things eventually went. Whining about it would do little to change anything. So I ate the work and chalked it up to "education fees and tuitions."

Thanks for the cold glass of reality, Mark. Chilled, but refreshing, indeed.

;)

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
- Antoine de Saint Exupéry






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Tim Kolb
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 3:28:36 pm

It sounds as if the bid was based on a different project scope than what was delivered...it happens.

The biggest concept here is the one of "creep"...no, not the client.

I'm talking about the way that the scope of a project will slowly inflate until you realize that you're WAY out of your estimate or quote and now you have to go back and attempt a massive correction (I would characterize a 25% overage as 'massive' on most projects).

The key concept here is constant review of the definition of the boundaries of the agreement.

If the director has 3:30 of screen time and you spec'd 2:00, you ask which 2 minutes he/she would like you to do. When they say they need it all, you say "I can sure understand that...I'll even hold my per minute price for you, so as soon as you get that revised agreement signed, we'll get going straight away..."

If they started with 2 minutes and added during the project, you simply ask which 30 seconds he/she would like to cut out of the original agreement to make room for the add. If they don't want anything cut, you say "I can sure understand that...I'll even hold my per minute price for you, so as soon as you get that revised agreement signed, we'll continue with the project straight away..."

If you allow ANY scope creep, you now put yourself into a "How much is too much?" dilemma. If you immediately address the first scope creep that occurs, you can do it with courtesy and a smile and it becomes a very matter-of-fact, non-adversarial process.

Once you've allowed the work to be done, trying to figure out whether or not you can invoice it is kind of pointless. You have no leverage and the client may very well feel a little ambushed and betrayed regardless of their being the cause of the problem. If you haven't controlled the process and simply halted progress until the discrepancy was addressed-now you've become part of the problem, actually a bigger part than your client.

The time to renegotiate is when you're faced with the change, not after you've completed it.

It's like a salon trying to repossess a haircut...


I think you have potential to create a real problem with trying to bill out this type of overage. You'll need to ask yourself whether or not this person may make the entire invoice into a legal issue and you may be at the very least, significantly delayed in receiving even the fees under the original agreement.

If it makes you feel better, you could just show the overage on the invoice, discount it off, take the money and be done with it. As has been stated before, there is never a next time...and if there is, unfortunately the only two precedents you now can set with this client from their point of view are;

1.) "This guy billed us way over his quote and I feel it was bait and switch." or;

2.) "This guy has already proven he'll work at a massive discount and in the back of my mind, I've defined what he'll cost going forward by my past experience."


Unfortunately, there just isn't a good way to move from this stage of the game...










TimK,
Director, Consultant
Kolb Productions,


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Mike Smith
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 3:06:11 pm

If you made a mistake, it was perhaps to storyboard and plan for a three-and-a-half minute script project without raising this issue clearly with your client. I'd guess you knew at that stage that things were headed out of scope.

Your client may be genuinely strapped for extra budget, may be playing hardball, or may just want to avoid going back to his/her boss to ask for the extra.

My experience is not the same as grinner's, in that I haven't found that raising such issues, early, politely and clearly, causes any long-term relationship damage with a non-grinder(copyright Ron)client.

The question for you, I guess, is whether or not it's too late to be firm. If you based your pricing clearly at least partly on on running time (which can be fair for an animation project) and you are now asked to deliver more than quoted, then you could reasonably revisit the price.

You could try calling your client and trying to get into a negotiation - you want to help, but you're at nearly double contracted running time: what percentage of the overage can he get you this time? Or alternately, which two minutes would he like you to render and deliver? And see what response you get. It'll tell you a lot about your client.

In fairness, though, he could point out that you should have signalled this issue much earlier, at the planning stage, so that you both could adjust running time or price ahead of your doing all the animating and project setting work anyway.

But if he takes grinner's suggested view, is not at all sympathetic (he knows he's trying to get more than he's paying for), and tells you to eat it "this time", not only does it tell you what kind of client you have, but it leaves you with the question of how to respond. Either deliver and be happy, or negotiate firmly (contracted length or additional costs, causing client distress at failing to get something extra for nothing) and be happy.





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Tim Baker
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 3:30:26 pm

I'd have to say Ditto to MIke, but I think one thing that you all missed is that he said he brought up the fact early in the stages of production and the client said he would cut it down later in the process.

Probably one fault of Mark B. was to let it progress past this point, but I have done the same again in "good faith" but made sure to point out the fact that it was out of scope and there would be additional charges.

Mark R. I'd say you are being a little harsh...unless you are one of those perfect business people in this crazy business of ours and has never run into this situation...you too missed the point that he brought it up early and tried to confront it...as long as he has documentation to prove it...he can most certainly go after the extra money...he did the work...it was out of scope and he is most certainly due the overruns.

He came here for advice not sniping and belittling of his professionalism and business acumen.

Tim Baker

Chameleon Mobile Video Productions

(239)849-3295

"It is not the light at the end of the tunnel that we should seek...it is the courage to take the next step in the dark that we must find."


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Mark Suszko
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 8:33:55 pm

Give a rough estimate of the hours needed, bill by the hourly rate and try never to bill to a fixed fee. That's my policy. If changes take longer, without specific contractual language to allow for the slip, you're boxed in with a fixed fee. Charging by the hour, more time = more pay.


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Chuck Pullen
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 10:01:42 pm

Here's what I would do... Deliver your master so that it stops at exactly two minutes in and goes to black! Then you explain "You paid for two minutes...Here's your two minutes!" I know not really constructive advice, but I find myself developing a "Bob Zelin Complex" lately!


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Richard Herd
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 10:35:41 pm

A little hard ball! I like your style, man.


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Mark Raudonis
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 10:02:22 pm

Harsh? Maybe. Perfect business person? No way. But we have been known to play "high stakes" poker with delivery of masters vs delivery of checks. That's really the only leverage you have. That's what I mean about "paying attention to business". For example, adding a clause in your contract that states you own the copyright of the work UNTIL the invoice is paid in full. It's much more valuable to go after "Breach of copyright" in court than just "unpaid bills".

One more comment. It's often NOT the director that deals with business issues. If you can successfully separate the two (creative and business) and navigate both waters, then you will be fine. Ignoring one over the other is where the problems arise.

Mark wanted advice, I supplied it. The "harshness" was thrown in free of charge.,

mark

[Tim Baker] "Mark R. I'd say you are being a little harsh...unless you are one of those perfect business people in this crazy business of ours and has never run into this situation...you too missed the point that he brought it up early and tried to confront it...as long as he has documentation to prove it...he can most certainly go after the extra money...he did the work...it was out of scope and he is most certainly due the overruns.
"






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walter biscardi
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 10:09:55 pm

[Tim Baker] "Mark R. I'd say you are being a little harsh...unless you are one of those perfect business people in this crazy business of ours and has never run into this situation...you too missed the point that he brought it up early and tried to confront it...as long as he has documentation to prove it...he can most certainly go after the extra money...he did the work...it was out of scope and he is most certainly due the overruns. He came here for advice not sniping and belittling of his professionalism and business acumen."


I don't see anything as harsh when it comes to business quite honestly. Business IS harsh if you want to succeed. There's no being a nice guy as I've come to find out. There are times when you have to man up and take something because you messed up and there are other times where you have to stand up for your own rights and rates.

I think what Mark wrote is pretty much hard knock lessons learned. If that's harsh well, then don't get into business and you'll be able to avoid backstabbers, lawsuits, lying / whining clients and all the other fun that comes with being 'the guy' who own the business.

Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author.
Credits include multiple Emmy, Telly, Aurora and Peabody Awards.
Biscardi Creative Media

Creative Cow Forum Host:
Apple Final Cut Pro, Apple Motion, Apple Color, AJA Kona, Business & Marketing, Maxx Digital.

Read my Blog!


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Richard Herd
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 3, 2009 at 10:34:39 pm

I wonder what would happen if you deliver what the PO calls for, 2 minutes.

Can you imagine his face when the picture just stops at 2?

He'll demand, "Where's the other 90 seconds?!"

"90 seconds of what," you ask sheepishly.

He says, "The film is 3:30."

You can pull out the PO and say "Sorry. I thought the PO was for 2 minutes."


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Patrick Ortman
Re: Project over runs by 75% ... how do I charge 75% more..
on Jul 6, 2009 at 10:51:28 pm

You guys are awesome. I don't know that I would have the balls to do that, then again it depends on how screwed you felt and how much potential future business this customer could give to you.

In general, if there's any possibility that the messup was due to my company's fault, I eat it. Happily. Like Ron said, file under "tuition". Because you never know, that client could bring in future business. Happens all the time.

Then again, if the client is a sociopath all bets are off.

And there are a lot of sociopaths in this world, especially lately.




---------------------
http://www.patrickortman.com
Web and Video Design


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