No more, no less, just right

No more, no less, just right
Cutting out the cost-savings agreement
 Mike

The buck starts somewhere. When it gets to NorSouth Constructs, we handle it a little differently than our competitors, like the fact that we typically don’t do cost-savings agreements. It may sound weird, but that’s how we operate. And it works out for our clients, which is most important.

 Colin

From the get-go, we’re clear about our economic expectations on a deal. Our clients agree to our fee and it’s delineated in the schedule of values. Frankly that’s all we’re going for – no more, no less. It’s common in our industry for companies to enter into a cost-savings agreement. Some people need that, but not us.

 Mike

Some clients don’t get why we do business this way and wonder why we don’t build a cost-savings clause into our contracts. I recall one time, we were talking through contract terms with a client. I was asked what I wanted to do for the cost-savings clause and said, “It’s all your money, we’re not having it.” And he was a little dumbstruck by the thought of it.

 Colin

Just before I felt the need to check his pulse, I followed up with what Mike said by telling him that we would like our fee, and that’s that. It was then that he told us that he thought we’d work harder if we had an incentive. In the end, we did enter in a cost-savings agreement. But that said, the portion of buyout we were entitled to ended up going back to the owner to use for upgrades.

 Mike

Yeah, he couldn’t believe that either! We take pride in our jobs and don’t need anymore financial reinforcement than the fee we get when the job is done, and done well. The satisfaction of doing well is good enough of a motivator for NorSouth Constructs.

 Colin

That philosophy starts at the top with our leaders Bill Johnston and David Dixon, and it carries strongly throughout the whole organization. It’s like I often tell my kids, “Just do good, and if you don’t, then do better next time .”

  Want to learn more? Get in touch with Mike and Colin by leaving your comments below. Thanks for following along as they take on industry issues together!
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