Seeking advice on compensating contractor for structural work

[Grant Liddle]

My wife and I are currently working with a contractor who is addressing a foundation issue with an older duplex that we purchased last fall.  Unfortunately, we discovered that the main support beams in the floor of the house was rotting and needed to be replaced.  We hired a contractor who is currently replacing them with 2 steel I-beams (one for the front half of the building and one for the rear half, both in the middle of the building).  Of course, when work began there were other issues that appeared that needed to be addressed as well.  Our contractor gave us a price followed with a change order for the additional foundation work that needed to be done and in both cases we accepted his price without negotiating as the price seemed fair to us.  We also have confidence in the technical ability of the contractor, and he works like a beast when he is on the job-site.  So, no issues with the quality, competence or work ethic of the contractor. 

However, he is poor at estimating, both the time it will take to complete the job and also on his internal costs.  My wife is acting as the GC on this renovation project, and she is at the job-site every day.  So, she sees the amount of effort the contractor is working (sometimes he is there until 11pm until he gets to a good stopping point).  She has also developed a positive relationship with him which has led to discussions with him sharing his financial situation (which is not terribly good due to the poor estimation skills mentioned before).  My wife has recently mentioned to me that she believes we are treating him unfairly because based on the amount of work that he is doing, we should be paying him more money.  Her argument is that had we gone with another contractor we would have spent a lot more money (Keep in mind we don't have estimates from other contractors and this is purely a gut instinct).  And the contractor has not asked us directly for more money, but he has confided in my wife that he is losing money on this job.

I am reluctant to give him more money at this point (unless there is a valid scope increase that was not included in his original quote) until he completes the job because we have already paid him ahead of the agreed upon draw schedule.  I am open to possibly giving him some extra money once the job is completed.

What is your recommendation?