Weeks of emails debating $150 charge
I am a Project Manager for a construction company that works primarily for the Federal Government. When a change happens on a construction project, we need to put together a detailed cost estimate, then the government reviews the estimate and occasionally asks for additional information or more detail if my estimate is not within an acceptable % of their estimate. Normally there are no questions if my estimate is within 5% of the IGE’s (Independent Government Estimates). That is the check and balances to evil general contractors taking advantage of the system (⸮). Don't get me wrong, I am an evil general contractor, but they shouldn't just assume that without doing the research themselves.
While there are still $500 hammers and the occasional $1500 toilet seat, sometimes it is nice to see that there is some accountability in the occasional government agency. However, it has become quite painful the last couple years with how “nickel & dime” some agencies can be. The whole: “Can’t see the forest for the trees” mentality has been running rampant recently with many agencies. And that is where 20 pages of backup for a $150 charge just make me giggle for hours.
Just over a month ago, I submitted a cost on an official change order for some construction material. The government Project Manager questioned the freight charge that was quoted and the weight/volume of the material stating that “their” estimate did not match what we had proposed and that the freight charge need to be reduced, and that I had to backup my estimate with a more detailed response.
After weeks of repeated responses that it was a flat fee for freight and it would not change if it was a single 20lb lag or a full pallet of material, the government PM decided to add an increasing number of people to the email chain in an apparent attempt to point out I was overcharging them. It started with adding my direct Sr PM, then my company’s Director of Operations, and on to the owner of my company, while on their side adding a dozen government employees, some I had never seen mentioned on this project. I had no idea what their end game was, but after 3+ weeks of back and forth there were literally 25 people on an email chain all over a $150 freight quote.
The quote from my vendor listed $150 to transport 1800 lbs of material. This is pretty typical as a flat fee within a certain distance of a jobsite. They argued that it could not be exactly $150 and I need to provide backup.
I proceeded to REPLY ALL on the email and wrote the justification in the form of a math problem and attached 20 pages of backup (8 pages just on Arizona Tax Depreciation code (Section 179) for Sprinter Vans, which is something I did not know about 3 weeks ago); citing gas prices, mileage with detailed maps of possible truck routes, vehicle maintenance and depreciation charts from the State’s Department of Revenue, the current minimum wage rates in the State, and more. I easily spent well over 4 hours of my time putting this together, but this is malicious compliance after all.
It is 288 miles round trip and 4.5-5 hours to make a delivery depending on traffic
At 16 mpg for a loaded sprinter van, that's 18 gallons of gas, or down to 5-8 mpg on a 43' flatbed (I have no idea what vehicle they will use to deliver the material, but am using "standard industry practices")
Diesel is currently $5.50 gallon in Phoenix, so that equals $99.00 at a minimum and up to $183 in gas alone, leaving $51.00 (to a negative $33.00) for labor to drive for 4.5-5 hours which comes to $10.20 hour. This is less than AZ minimum wage ($15.15 hour...assuming they are paying only the minimum wage)
Assuming the maximum fuel efficiency, $99.00 for fuel plus $75.75 in labor costs comes to $174.75.
Now for Tax Depreciation vs Market Depreciation:
Section 179: Because a Sprinter van has a Gross Vehicle Weight Rating (GVWR) over 6,000 lbs, businesses using it more than 50% for work can often write off up to the full purchase price in year one via Section 179 Tax Exemption.
I got a quote for a new 2026 Mercedes-Benz Sprinter van in the basic configuration and included that at just under $49,500. That divided by 2080 hours in a standard work year gives an hourly depreciation of $23.798. Times 5 hours is another $118.99
So they were correct and the $150 freight quote was wrong. I thanked them in my email, and submitted my revised proposal with $293.74 for freight.
That is a hard won $143.74 and I can't imaging how many thousands of dollars in lost time just from including that many people on an email chain for increasing numbers of weeks.