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Ely
Ely, Attorney
Category: Business Law
Satisfied Customers: 102600
Experience:  Counselor at Law.
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Can the city of san francisco ask a contractor to work money

Customer Question

can the city of san francisco ask a contractor to work for less money than its costs?
Submitted: 1 year ago.
Category: Business Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

The answer is yes. The city can ask a contractor to work for less than they allotted in the budget for the project.

However, the contractor does not have to agree, and can enforce whatever contract/bid terms were agreed-upon earlier.

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Customer: replied 1 year ago.
our 3 yr contract is expiring they want us to honor an old rate for a few months before it goes out to bid we want to raise the rate they say its not negotiable...what do we do?
Customer: replied 1 year ago.
what and where are the laws governing contracts being bid below cost?
Expert:  Ely replied 1 year ago.

You have a choice to make:

-you can agree to negotiate, or

-you can mandate that the amount will be raised or kept the same.

However understand that they do not have to renew so once the 3 year contract runs out, the city may simply say "thank you, ***** *****"

It is up to you to decide whether it is worth continuing the relationship for less compensation.

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Expert:  Ely replied 1 year ago.

This is a contract situation. They can ask to re-negotiate. They are allowed to do so. However you do not have to agree. And, they have to pay out per contract until the contact ends. But then they do not have to renew.

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Customer: replied 1 year ago.
they said the contract is not negotiable but it will expire...
Expert:  Ely replied 1 year ago.

So, you have a contract at $5/week and it is ending soon, and the city is asking that once it ends, you take $3/week for some time. Is that what is happening?

Customer: replied 1 year ago.
No we have a contract at $5, they want us to stay at $5, but our costs due to city requirements is $6
Expert:  Ely replied 1 year ago.

Ah, I see.

So you agreed to a contract, but your costs for the overhead will mean you LOSE more than you EARN. Correct?

Customer: replied 1 year ago.
Customer: replied 1 year ago.
we have over the 3 years, they are taking advantage of small businesses....
Expert:  Ely replied 1 year ago.

Thank you.

On this website, I do not always get to give good news, and this is one of these times.

If your overhead causes you to lose more than you earn, this is not an affirmative defense to being mandated to finish out the contract. Your company is still bound by the contract it signed with the city. If your company does walk away, the city can sue.

Please note: If I tell you simply what you wish to hear, this would be unfair to you. I need to be honest with you and sometimes this means providing information that is not optimal. Negative ratings are reserved for experts who are rude or for erroneous information. Please rate me on the quality of my information; do not punish me for my honesty.

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