Dealing with tariffs and supply chain issues

Changing tariffs and shifting conditions in the supply chain have created challenges for construction companies over the past year.

At BC&E’s “New Realities of Construction” webinar in December, Bill Cole, President of Cole Roofing and Gordian Energy Systems; Jerry Taylor, Vice President of Sales and Estimating at Baltimore Fabrication; Daniel Hefter, Senior Estimator at Harkins Builders; and moderator Peter Loftus, Principal at CLA discussed how to best contend with tariffs, materials pricing and other supply chain challenges.

• Conduct “radically candid conversations” with all parties in construction projects – owners, GCs, subcontractors and suppliers. Honest, ongoing and detailed conversations are essential to identifying possible pricing and scheduling issues, and to negotiating acceptable ways of sharing risk.
• Stay flexible and focus on solutions. Changes in prices or lead times may be mitigated by value engineering, bulk purchases, early releases, expanded storage, sending your own trucks to retrieve material, or arrangements that provide select trades with additional resources.
• Finetune your estimating and bidding practices. Deepen your relationships and information sharing with suppliers, and maintain a data warehouse to provide accurate, real-time pricing. If volatile prices necessitate an escalation clause in a bid, spell it out rather than using that escalated price as your bid. A lower price plus a clear escalation clause will make you more competitive and give the GC an opportunity to properly assess the financial risk.

In this brief: Baltimore Fabrication, CLA, Cole Roofing, Gordian Energy Systems and Harkins Builders.