A survey states that electrical contractors buy over 90 percent of electrical materials.Cooperation between these parties is required to get these materials to a project.
Electrical contractors determine the type and brand of about half the materials purchased. On projects where adherence to a performance specification is the caveat for materials installed, the estimator must be specific about the materials included in the estimate and priced for the bid. I witnessed the antithesis of this when an estimate included receptacles, and I suggested someone pick up a case. When the supplier’s clerk didn’t ask for a catalog number, we were sold the high-priced spread. Since then, I have become a fanatic about including catalog numbers on the takeoff listing.
In about 30 percent of projects, designers specify brands. This type of spec is a prescriptive one. When choices are given in the specifications, it is important that items of considerable quantity and dollar effect be priced out, so the best brand or catalog number can be selected. Brand favorites vary with geography. A further consideration is item availability. Exercise extreme care with low-ball prices. These products may have a long lead-time, and resulting labor losses wipe out any anticipated savings.
In nearly 20 percent of projects, others specify one type and brand. While this may decrease an estimator’s apprehension, the lack of enforcement of the specifications on too many contracts gives the unscrupulous contractor an edge in the bid. Single-choice items are usually limited to private construction, or where an existing installation has to be matched. A more nefarious situation is where a specification is exclusive to one product for reasons other than the installation, price, or availability.
Some specifications include an “or equals” clause, which can cause problems for an estimator. Sometimes, the designer must approve any substitution 10 days or more in advance. The time and cost to prove the product is indeed an “equal” rests squarely with the contractor, or if possible, the “equal” item manufacturer. The estimator’s ambivalence in choosing the “equal” is in recognizing the competition may opt for it because of its usual accompanying lower cost. I suggest always including the specified item in the bid, lowering its markup, and hoping that the “equal” will be accepted after the bid. If the bid form allows an alternate bid using the lower-priced product, then an owner may want to share the savings. The “equal” may be preferable, because of previous delivery problems with the specified product. State this plainly to the awarding authority. If he or she still insists on the specified product, and the contractor has done everything possible to get the material on time, then the awardee is on notice of a possible delay because of the specified materials.
Long lead times for getting the equipment from the manufacturer to the job site need to be assessed for the sake of the project’s scheduling and completion. Lead times are critical, especially for fast-track projects and jobs of shorter duration. Estimators should be especially wary of delivery times quoted to designers. On a critical time path project for a municipal sports field, a salesman convinced the designer to use his product based on a favorable delivery time. The salesman also suggested a steel pole manufacturer without checking to see if the poles and fixtures would arrive at the same time. The fixtures showed up in 30 days and the poles in 185 for a 90-day rush job to meet a city commitment. Fortunately, we had done everything correctly, so we avoided blame and liquidation penalties. If a salesperson is insistent, ask for a written guarantee or a performance bond, and stand aside as the jet-propelled individual leaves your offices.
More often, owners attempt to circumvent the contractor by purchasing project materials. When this occurs, the contractor must consider several points. First among these is that the owner purchases the correct item. Some will request the contractor’s cooperation and approval of the product without paying for this service. Tell such customers what it costs the contractor to buy the item and add a reasonable mark-up.
The approval process can also fool owners. For example, if a restaurant owner wants to import fixtures, do they have a listing label? If there is a problem, who will pay for product removal and reinstallation? Owners can delay fixture installation, usually by omitting lamps. Then there is the matter of receiving the owner’s purchased materials at the right time for the scheduled installation. The estimator must notify the owner of these various responsibilities and make him or her aware that any lapse on their part will trigger a change order. To head off problems, an estimator should issue a “boilerplate” letter or statement early on.
The conclusion of this two-part article, scheduled to run next month, will delve more deeply into the subject of change orders. EC
DAVID is a professor of electrical technology at Long Beach City College, Calif., a consultant, and an expert witness. He can be reached at (562) 597-1877 or by e-mail at email@example.com.