How to Handle the High Cost of Metals
The escalating cost of building materials is challenging the construction industry to manage costs, including anyone designing with metals, especially “exotic” types, in order to achieve beautiful and sustainable structures. As far as metals are concerned, prudent steps can be taken to minimize exposure to rising prices.
Make Commitments Early
The long process from concept to completion works against the estimator. Material prices increase over time, which negatively impacts the budget. However, trying to play the market by anticipating a decline in prices before placing your order is a mistake. If you are highly skilled at predicting market prices, you should become a commodities trader, but if you are a contractor, installer or fabricator with a metal project in your backlog, you should commit to the work at the earliest possible moment. Of course, when prices are declining, dragging your feet can put money in your pocket, but if you are inclined to speculate in times of price volatility, you are better off on Wall Street.
Secure Funding For Stored Materials
In accepting the early commitment argument, the natural question is: “Who’s going to pay for the metal before it’s needed?” This issue needs to be communicated early in the game. Ideally, the owner should be prepared to provision the cash. The bid documents should clearly reflect this.
Do Value Engineering Up Front
In the last couple of years, as metal prices have continued to move upward, a significant number of metal products – stainless steel, zinc, copper and even aluminum and steel – have been value-engineered to cheaper materials. While downgrading materials may have “saved” money upfront, the extra time spent searching for cheaper alternatives subjects the budget to escalating prices. Moreover, substituting materials that require maintenance or replacement within the life span of the building may actually increase the lifecycle cost. The owner is best served when an appropriate metal with a long lifecycle and a low lifecycle cost is specified for the project and when all parties stick firmly to the plan.
Communication is critical. If an owner doesn’t understand your rationale or see the value in the materials you selected, state your case. There is much to consider when selecting the right metal for a particular project. Environmental conditions, the structure’s end use, and the amount of anticipated maintenance are just a few. And there are many other considerations once the particular metal is selected, such as grade and finish. You can’t assume that the owner has taken all of those factors into account. Examples of past projects, research, testimonials or information from a material provider or consultant can help solidify your arguments. After all, who wouldn’t want a metal that would need little or no maintenance and would last the life of the building?
