April 1, 2023

When you finally decide to start your electrical project and choose your preferred electrical services provider, there are several questions you want answered. The list of questions can seem endless, from who will work on the project to how much it will cost to the process involved. One of the primary questions you must answer when working with an outsourced company is whether you will use a fixed-price contract or an hourly rate.

Generally, a fixed-price contract is where you receive a quote of the total amount required to complete the project upfront. It entails agreeing on the scope of the project, the deadline, and the final price. Alternatively, an hourly rate is an agreed amount per hour before a project starts. It is more suitable for projects with scope, deadline, approval process, and other crucial parameters that are unclear. Below are some reasons why fixed-price contracts are not ideal for Astley Electrical clients.

They Do Not Cater to Unexpected Obstacles

As mentioned earlier, a fixed-price contract begins with defined parameters. As much as you try to account for various factors, you make decisions with limited information on the project’s requirements. Thus, when you encounter unexpected obstacles, like the need for additional materials or increased labour hours, changing the terms of a fixed-price contract can be difficult or expensive. On the other hand, an hourly rate allows the professional to deal with challenges as they appear and alter the project’s scope as necessary. 

Hourly Rates Ensure You Receive Better Service

One of the main benefits of hourly rates is that clients are more likely to receive better service since the contractor is receiving adequate compensation for the hours they have worked on the project. A project with a fixed-price contract may take longer to complete due to unexpected obstacles. Since such agreements leave little to no room for changes, you will likely end up with substandard results or significant delays in project timelines. An hourly rate also ensures the contractor receives adequate compensation if the project takes longer than expected.

Fixed-Price Contracts are Ideal for Short Projects

Since short projects usually have a defined scope and you can easily determine your priorities and the project’s requirements, fixed-price contracts are an ideal option. On the other hand, if you have a complex electrical project, fixed contracts may be too rigid to cater to all aspects involved. 

For instance, if you have a project to install a fire detection system, you may find that you need to adjust your lighting system to incorporate the fire alarm system fully. With a fixed-price contract, your contractors will likely be unwilling to alter the lighting system, since it is outside their scope of work for that project. However, when you use an hourly rate, your contractor will advise you on the best step to take and do what is necessary to ensure you are happy with the end project. Complex projects require constant reviews and approvals, flexibility, and modifications, which an hourly rate can best compensate your contractor for their expertise.

Get the Best Results with Astley Electrical

While many clients believe that fixed-price contracts are the best, they usually overlook several variables that can affect the quality of your project. Not only does it minimise the contractor’s flexibility, but it also consists of long planning processes, expensive maintenance, and inadequate compensation to contractors. 

At Astley Electrical, we advise our clients to provide an hourly rate as it provides a balance between service quality and budget constraints. It is the best option for clients who prefer effective communication, better service, and optimum transparency.

Contact us today for expert consultation about your electrical project and how we can help you get your desired outcome.