Fuel contingency

Discussion in 'Lawn Mowing' started by BTLawncare, Sep 1, 2013.

  1. BTLawncare

    BTLawncare LawnSite Member
    Posts: 39

    Hello. In the next few days I will be walking an HOA with the representative and putting in a bid. My first of this kind. My question is, with the Syria thing looming is there a way to put in a contingency in case of extreme rising fuel cost, or is it one of those deals where you do the best estimate and hope it works out? Thank you.
     
  2. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Posts: 1,652

    If your doing a contract a fuel surcharge is absolutely necessary
     
  3. BTLawncare

    BTLawncare LawnSite Member
    Posts: 39

    Thank you Reddens for the response. How would it be properly worded into the details?
     
  4. MJB

    MJB LawnSite Silver Member
    from Wa
    Posts: 2,869

    Keep it simple : In the event that fuel prices rise above $___ per gal. I will be forced to charge a fuel surcharge of $______.

    Im sure you'll get better suggestions but this is what I have used in the past.

    You could add to it Due to fluctuating fuel prices, or Due to unstable fuel prices. Just play with it and do it the way it sounds best to you.
     
  5. herler

    herler LawnSite Fanatic
    Posts: 5,144

    It's your contract so you can do anything you want, no need to ask.
     
  6. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Posts: 1,652

    I charge a percentage of contract price surcharge once price rises above 4.15
     
  7. BTLawncare

    BTLawncare LawnSite Member
    Posts: 39

    Thank you. I wasn't sure how to lay it out. All my customers are residential. I'm in my third year and haven't had any other opportunities other than residential.
     
  8. dhardin53

    dhardin53 LawnSite Senior Member
    Posts: 711

    I don't see a surcharge for lawn care personally. I understand if your gas cost is like 33% of your cost to mow a customers lawn. But the continues slow steady raise in fuel over the past years is what I have based my occasional price increase in the account and have informed my customer's at the beginning of the year. When gas is dips down from time to time I stock up and can forgo a big fuel increase for a short time.

    Lets face it for the majority of LCO as much or more of the gas cost is in the truck getting you to the job. Ok some may have a small daily route and many mowers on the ground burning more gas in mowers than the truck for that day. But on average the truck/transportation is the gas hog.

    The reason I don't put a surcharge for gas in a contract up front, Is I was awarded a commercial account because the lower big that had this in there contract lost it because the business could see it costing more over a mowing season. I had less travel cost than the cheaper top bid.

    If you raise your price for a gas increase you will need to lower your price if and when gas goes back down. Now this sets the stage for a confused customer.

    I see over the road tuckers with a fuel surcharge, but Lawn care I would hope gas will not increase that much to do something this extreme.
     
    Last edited: Sep 3, 2013
  9. Caddyshack Lawn Care

    Caddyshack Lawn Care LawnSite Senior Member
    Posts: 732

    I'm with this man. Fuel is such a small percentage of my costs that it's not a major factor in my price.

    And transferring the risk from you to a potential customer puts a bad taste in the mouth of the person awarding the contract. I'd assume the risk. If the price of fuel goes through the roof you'll have to have a talk with alll your customers anyway.
     
  10. Tunica

    Tunica LawnSite Member
    Posts: 124

    If you put wording in a contract about rising fuel costs, then you should also address falling fuel costs.
     

Share This Page