to the OP, not out of line in my opinion, this is a significant financial transaction and if you cant get what you expect when promised then their is no reason for you should not setup a contract... No reason @ all... if the shop doesn't want to sign up.. move on.. you are paying good money and providing a good timeline that everyone agrees to then their should be no problem.

I bet their is more then a few people who ordered from NRE who wish they had this up front..

Tim,

I understand what you are saying for sure. I think one of the issues is you may not have a clear understanding of the PO process. It is a two way street. The terms on the PO including Payment terms more importantly for you are there to protect both parties. The contract requires the customer to pay for goods and services rendered. Court is not always the only course. You can also turn claims over to collections. you get money and they get the job of chasing the customer. Quite a few people move when credit rating is threatened. That being said, you are correct, if taking this route or court is not something you are willing to do, then the contracts mean nothing for either side. If you look at Marty's post, that is how most of the business world works. It seems this car industry has it's own set of rules. With the examples you gave above, why are you still in this business doing things the same way. It's always been said that people that continue to do things the same way and expect change are in for a huge disappointment. Rather than than abruptly saying I don't want your business if you show up with a PO or contract, a simple negotiation could really pay off. When you are talking these highly specialized, expensive engines it would not be out of place for you to ask for an escrow account be setup at a bank that can be drawn on when milestones are hit. Also, when the customer changes his mind, you send out revised quotes and receive revised PO's or whatever you have in writing. Verbal deals are the dangerous ones. Communication, documentation and general good business practices will go further than anything.

All that being said, I hope you don't take my comments in a negative way. I am simply trying to add perspective from outside the car world because it truly runs on its own set of rules it seems. I love this industry and hobby and do not want to see it crash from bad deals and people loosing tons of money on these bad deals. Customers or vendors. I am by no means an expert and am only providing my opinions. You guys are one of the most respected shops in the industry and I respect what you have to say on the subject. Hopefully just these exchanges will help educate some people allowing them to have better experiences in this community. :thumbsup:

I have quite a bit of business experience and get what you are saying and don't take offense to it but we are a small 2-3 man shop and the administrative time involved in what you are talking about wouldn't be cost effective to keep altering po's every time someone wants to change something. We purposely keep our crew small to reduce overhead. Imo the escrow means nothing unless we had access to the funds which would make it pointless to have it then. We won't work ahead the money because I'm not getting stuck with someones half built engine or parts anymore, if you don't pay that week then the engine is going to sit until you do. I have no idea of your knowledge level of an engine of this caliber but the piece price can get pretty insane on this stuff, 1 example I can give is the pushrods we use on a high boost engine are $1000 a set. You can see why I won't finance peoples parts any more, the cost adds up fast in a week alone depending on where the build is.

I've set up about 5 shops with some billing documents. That one day will be converted into software.

Page 1 - Project Scope (Engine Build, Chassis, Sheet Metal, Parts)

Page 2 - Hard Part Costs (I encourage the owner to do this)
- I know some shops like to buy parts because they can make a small profit but the time spent doing is hard to bill. Especially when the parts come in wrong and don't work.

Page 3 - Estimated Labor Costs

Page 4 - Project Creep
If you do this then you need to consider this.
ex. If you move the firewall back, then you need to consider what will be in the way under the dash. (I can give plenty more)


Then there is a weekly sheet that is mailed to the customer. It has an Invoice, Escrow (whats left ) & most important Weekly Hours & What work was performed. Every week the customer gets this document and he must have a minimum agreed upon dollar amount in the account for any work to be performed.

If the account goes below then the project is put on hold. If after two weeks the account hasn't been brought to the agreed upon value then Storage charges can be charged.

The Customer has the right to come get the car and bring it back when he has money to keep the project in motion. If a car is taking up space in a shop it's not earning money for the business owner and both parties get frustrated.

That is a fair way to do it Marty. The only thing I disagree with is the buying of the parts, not because I make money off of them but because people often times either buy the " equivalent " or order the wrong part. I make very little if anything off of the parts and can pass my discounts on to the customer.

I agree with the statement "equivalent" that can be dangerous. If they are ordering say the full DSE or Ride-Tech catalog then it's safer for the shop owner to not have to buy them.

Point being if the part was ordered wrong then it's the customers responsibility to spend the time to ship the parts back, reorder the correct parts and deliver them to you.

It also give the customer ownership in the project as to what the car cost to build. There is no sticker shock when you order the 10,000 dollar DSE front stub with brakes and then charge them 20 hours to install it. If they have already spent the 10 and you charge them only 1500 to install it they feel like they got a fair deal. It's a mind game.

Just like when the wife goes shopping and buys something that is 90 dollars she tells you it was on sale and she save $100.00.

But when Car Guys & Gals buy parts the cost is the cost. We never look at it as we've save money.

This is so painful....

The alternate view is not saying that contracts are bad, escrow is bad. It is simply saying that:

Race engines are not roofs. A race engine builder is not the same as a roofer. And don't try to split hairs or wax philosophically about a race engine vs a custom high perf engine. A TT 540 is not the same as the engine in yer Camry.

Judges understand roofs. Judges do not understand $40-$50K TT540's. A smart experienced engine builder will already have been though the wringer with one or more litigious customers. It's usually the customer who makes a 5th to 1st downshift at 100mph resulting in valves bouncing off pistons. That customer type, like the judge who might decide the case, JUST DOESN'T GET IT.

As a result of the above, smart experienced engine builders choose their customers carefully. This proposed contract, no matter how sound it might be, will make a smart, experienced engine builder wary, so.....

Invert that train of thought: The engine builder who does sign the contract might not be smart and experienced. Which leads us to ------->

Find a smart, experienced professional engine builder. Ask for a written estimate on official company letterhead with terms, then demand an invoice with terms before forking over your deposit.

Well Said.

X2 I think this is what have been trying to get too. The problem is, there too many vendors in this industry that play buzz word bingo and have more excuses than solutions. It makes it oh so difficult for those of you that try to do it right.

Speaking of this, I will give Steve much credit. He is one of our vendors and an excellent one at that. I would not consider having to have a contract when business is done like he does it. In fact, our order changed mid-stream do to issues with one of Steve's vendors. He informed us of it, refunded us that portion of our money and found a solution for the issue. That is why our truck has his Muscle Drive/Shrifter setup in it! SIMPLE!

What you don't want to have happen is hand over 40 large to a vendor. The vendor then uses this money to pay his overdue bills, and, complete other overdue projects.
Then, for your job to be completed, the vendor needs more new money.
I have lived in this scenario.

If you are spending $40K to have an engine built there are other issues :) Might as well spend some extra $$ on whale penis leather in the interior..

http://jalopnik.com/5380680/15m-russ...-penis-leather

Because "There's nothing like a nice long ride on whale penis." lol!!!

On a more serious note, I have seen buddies getting shafted (no whale penis pun intended), on builds and am amazed on how many people are taking their cars or component builds form builder to builder after long waits, crappy builds, and horror stories. I think it is perfectly acceptable for a contract to be put in place to protect both parties and establish a base or relative budget and ETA.

Remember that any changes YOU make in scope or your builder suggests should be accommodated on the contract to adjust and realign to new budget and scope creep. A lot of the builds I am seeing here that are failing epically are due to owners spending a lot of time on the forums and getting swayed on different directions specially on what is becoming trendy or better yet after learning the way they shoudl have built their strategy and plan in the first place. My advice (which I am also to blame for not following :)) is to make a plan and try sticking with it. I am seeing 3, 4 7 year projects where people have spent a lot of time, effort, money and frustration, marriages and new builders going to waste, and their babies are nowhere done :)

I may have missed it but what are your goals with the car to begin with? Show? OUSCI? SEMA? Pickup chicks?

Tim no pissing contest it's all good! Just wanted everyone's take I fully understand what your saying.
Chad your my new spokesman!!!!!!:thumbsup:

One of my biggest fears right there !!!

This car is for me to have a blast with! Any of the above would be a bonus ! Except for the last one my wife MAY have a problem with that :D

Guys lots of great points. I see it from all sides and fully understand where everyone is coming from .

Hey my question is whatcha doing with 572???? :hello:

Rick we can talk about that!

Thank you sir!

The subject needs closure. The middle ground is for enthusiasts to have detailed conversations with their vendors about terms. Know where you stand and get it in writing from your vendor before providing payment. I've long wanted to present a list of questions related to terms. I'm sure that list would piss some other businessman off, because every business has a different perspective on terms. Within our own business we have different terms for standard / in-stock items vs custom long-lead orders. So there are no hard and fast rules.

The flip-side is that there are many common terms and policies dating back to the Sears & Roebuck Catalog days that help nail down fair transactions.
:ups:
I've been working in mail order since 1989. That's pre-internet and I started out working at an engine builder! None of these problems, policies, and solutions are new. If you guys wanna talk through a list of terms related questions, I'll start.

I don't know how I missed your comment Bob ! Trailer queen? Come on Bob you know better..:D

Dude, I feel like there are only 10 nice days a year where you live and 3 of those probably still get a little rain during part of the day, so it could be a valid question. Then again I clearly don't know Chicago very well. Last time I was there I drove from Midway airport to UChicago via 55th/Garfield (I think I got those right) because it looked like the fastest way there.

OH so you got to see some of the more beautiful areas of our lovely city!!! And your still here to talk about it !!:_paranoid

Mario

It is a Midwest Thing. Some people just do not understand it.:D

This is false, there are like 14 days, and 4 of those we complain cause it went from 60 outside to 95 and 100% humidity :)

Annually a lot of people travel long distances to sit outside during the day on the northside of Chicago and watch da Cubbies.

[QUOTE=Marine71;477849]It should be a law[/QUOTE
I'll bet you wish you had one! Your deal was a joke!!
I'm a southsider and would never be caught dead in that SH^T box Skip!

[quote=DOOM;478177]Mario,

Yep, it's rep as a crumbling toilet is well known on the east coast as well.