IACCM Contract Management Forum

« view all forum posts
2017-04-25 05:14:36

Can Service Provider charge to Customer for efforts spent on submitting rejected Project ?

If Client ask for a project and delivery put some efforts to develop estimation and submit it to client.
Client disapprove the Project. In this case can service provider claim efforts spent on submitting the estimation ?
 •   2017-04-25 05:49:31
Your question is not clear. First of all, did the client place an order on service provider for developing an estimation specifying certain amount as a fee for the services? If so, irrespective of client disapproving the project, service provider is entitled to receive the fee.
There could be another scenario wherein the payment of fee may be dependent on client approving the project. If that is the case, service provider will not be entitled to claim the fee.
Besides, in case of continuing relationship between clients and service providers, many a times, clients ask service providers to develop an estimate for new projects. Service providers carry out such estimation as a good will gesture. So there in no question of any payment arising out of such good will gestures.
So it all depends upon the specific case.
 •  Atos IT Services UK Ltd  •   2017-05-05 16:16:48
Providing outputs/deliverables are clearly stated that they include a charge for effort undertaken, then I would expect the client to pay for that effort, regardless if the work is subsequently taken forward or rejected.

For example, a level of effort to write proposals for a client may be part of a contract offering however, if a client asks for indicative costs and then subsequently a firmer offer 'capable of acceptance' is requested then you may feel this would entail a level of detail and complexity considered chargeable.. This would then be for client to accept the firm offer or not but the effort to write the proposal would remain chargeable.
 •  BIAL  •   2017-06-13 04:31:41
You will have to check in the present agreement if this can be charged (for new projects estimation). Most of the times efforts for submitting an estimation is not chargeable and there will be a timeline to submit the same. But if the agreement is silent, you may agree well in advance the charges for estimation. But bear in mind that this may affect business/sales.
 •  Sunderland City Council  •   2017-06-25 12:14:28
From my own working experience, it tends to be explicitly described that the client doesn't cover those types of cots. However, most of my work relates to functions that are openly tendered, rather than approaching suppliers to develop proposals. If you are approaching suppliers to develop proposals its probably worth stating explicitly whether you will cover costs incurred in developing them.
Replies: 4
Filter by category
Operations & Capabilities
Organization & People
Strategy & Management Tools