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what is a Contract Margin
« on: June 25, 2008, 07:26:13 am »
Hi Guys,

I have been doing some reading, Yes I can read a little bit as long as the words are not too big.

Can anyone kindly tell me what a Contract Margin is?

My initial thought was this is the levy on it. The price increase or decrease... is it the actual profit that a company would make on a contract though? oR is it the actaul percentage incase of stock, chemical, petrol other costs may flatuate at?

Help appreciated


regards

Dave



cheers

Fox

  • Posts: 824
Re: what is a Contract Margin
« Reply #1 on: June 25, 2008, 08:51:24 am »
I would have said that this is the % profit after all overheads and payroll, it soes depend on the context it is written in though.

Fox

Re: what is a Contract Margin
« Reply #2 on: June 25, 2008, 09:04:20 am »
Well if this is true, are we saying that the company are allowed to see the profit we are making from the contract itself?

Dapper

Fox

  • Posts: 824
Re: what is a Contract Margin
« Reply #3 on: June 26, 2008, 08:36:06 am »
Some yes, I don't give out costing sheets with a contract as norm but some larger contracts ask for them, when you are setting out your costs there are ways and means of putting other amounts of profit in different areas.

If you give out a costing sheet clients never expect the margin to be more than 10% an alot less in some contracts (sependant on size).

Fox

Re: what is a Contract Margin
« Reply #4 on: June 26, 2008, 09:37:59 am »
well I thought I was on the right track. Just wanted to make sure.

Yes I see I will have to make it look like their is not much profit in it.

Make out we pay the staff etc more i guess is one way


cheers


Dapper

Fox

  • Posts: 824
Re: what is a Contract Margin
« Reply #5 on: June 26, 2008, 01:22:58 pm »
I certainly wouldn't recommend lying on your costing sheet, these people see this kind of thing all of the time and would be able to work in a minute whether you have over inflated your figures.  Usually you would have to put the pay rates at the right amount, what I mean about adjusting the costings is not to lie about your costings but make sure that when you do your calculations on materials, equipment, PPE, administration, travel etc etc you put them through at the most they could possibly cost, this will probably be true for the first three months of the contract then costings will come down so you will make the saving there and of course your 'margin' will the % on the figure on paper making it slightly raised in true terms.

Hope that hasn't confused you!

Re: what is a Contract Margin
« Reply #6 on: June 26, 2008, 01:48:58 pm »
Nope has not confused me... you have been extremely helpful indeed. much apprecited

Dapper

John Kelly

  • Posts: 4461
Re: what is a Contract Margin
« Reply #7 on: June 26, 2008, 10:39:31 pm »
Likewise when I was involved in negotiating with insurance companies for flood restoration work full costs and overheads had to be itemised and you were expected to add 10% on top for profit.