One of my first jobs in this industry was as a price clerk and assistant purchasing agent at a wholesale house. I was responsible for pricing all materials sold, including those for deliveries and will-call pickups. The prices came from a 4-foot-wide loose-leaf book I had on my desk. This book was known as a Biddle Book and was published by Trade Service Publications. Price changes were received in the mail almost every week. All I had to do was tear out the old pages and insert the new ones.

Looking back, those were the easy days of material pricing. Major commodities such as pipe and wire had stable pricing and were often adjusted once or twice a year. When I became an estimator, pricing was still easy. We used the wholesale column of the Biddle Book and took a discount based on our suppliers’ policies. Eventually, price updates became digital, and the Biddle Book was replaced with a web-based version.

A global change

I don’t remember exactly when it happened the first time, but I remember the reason. Oil prices started skyrocketing, and the price-publishing services could not keep up. Wholesale houses ended up changing their pricing from a published price less a discount to a cost-plus basis, often quoting some commodity prices as only good to the end of the day. 

We’re once again facing significant price volatility. Our reliance on global resources such as oil, silver and copper has previously driven market swings. Currently, tariffs seem to be the main factor driving price volatility. Even speculation about tariffs has caused sharp market reactions. Consider the following bulletin I received from EPIC Pricing Service recently: “Pricing is changing faster than anytime in the past 20 years. We are doing our best to give you as accurate a target/market price as possible. There are several economical markers effecting the market at this time, the biggest is supply and demand. Supplies are very low [and] demand is high. This may be the biggest factor for quite some time, so please always check with your provider about supply and cost.”

Currently, I can find only three electrical material pricing services operating in the United States: EPIC Pricing Service, NetPricer and Trade Service. Each provides similar services. First, access to a digital price book. These price books contain millions of prices updated on a regular basis, usually weekly. Second, the ability to update the material databases in your electrical estimating software. Third, and maybe most important, the ability to connect your estimating software to your vendors. This allows an estimator to import today’s pricing from a wholesaler directly into their estimates. This is the fastest way to get current material pricing for every project you bid. These pricing services also have other features, such as links to manufacturers’ catalog pages and the ability to help prepare submittals.

Some solutions

I spoke with several industry experts during my research into material price volatility and heard the same solutions several times. At the top of the list is the importance of developing relationships with your suppliers, as they can help you protect the material pricing for your projects. Treat them well by paying your bills on time and by concentrating your purchases to just a few vendors. Also, talk to your vendors. They can’t help you if they don’t know you need help. 

During the times in my career when I was responsible for vendor relationships, I was able to make many deals to hold or lower prices. Even when copper prices were soaring, my wholesalers were able to hold the pricing I used to bid a project. Negotiating purchase contracts immediately after receiving a construction contract has been an effective method of locking in prices for far longer then I have been in the industry. 

During my first employment by an electrical contractor in the late 1970s, I was responsible for managing the purchase contracts my employers had negotiated.

Another solution I heard surprised me a little, as I was asking about material pricing. Here are some of the headlines I found after being told that labor must improve productivity: “Why the Construction Industry Must Climb Out of its Productivity Rut,” “Improving Construction Productivity is the New Imperative” and “Construction Cost Challenges Shift From Material to Labor.” I personally found this solution less than stellar, as most of the management and field personnel I have worked with strive for maximum productivity every day. I have found that project managers are responsible for enabling the field to perform the work. When project management is lacking, field production suffers.

Here are the important points from my experience and research: keep your pricing software up to date. Create, maintain and strive to improve your relationships with your vendors. Improve project management and, therefore, labor productivity.

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