Glaziers struggle with shortening “hold” times
The bid process has turned into a guessing game for contract glaziers as they attempt to compensate for rising prices and a shorter amount of time that suppliers will “hold” their prices at a certain level.
Less than a year ago, glass and aluminum fabricators honored glaziers’ contract prices for six to eight months, based on letters of intent. Hold times have since been reduced to roughly two weeks to 90 days, says Bob Linford, general manager for Giroux Glass in Los Angeles.
“I’ve been getting quotes that are good for 15 days,” Linford says. “That doesn’t do me a bit of good. You bid a project and it’s nine months later before you’re on the job. You’ve had two price increases in that time. How is a person ever supposed to estimate what the price is going to be?”
To protect themselves, glazing contractors include estimated price increases into initial bids, Linford says--but guessing comes with risks. “We put that cushion in, but if we overdo it, it puts us out of competitiveness. If we don’t put anything in at all, we’re going to hurt when the prices change.”
The more glaziers share higher costs with owners and general contractors, the better off they are, explains Barry Swaim, secretary and chief finance officer for Tower Glass Inc. in Santee, Calif. However, Swaim finds only about half of the owners and general contractors he works with willing to consider price increases from subcontractors.
“If they’re requiring a hard bid, then we’re left guessing. But some ask me to bid based on what the price is in today’s market and say we can quantify the difference as we go.”
Glaziers can further protect themselves by carefully choosing suppliers. Swaim says local fabricators he works with often honor quotes longer than some larger suppliers. He attributes this to their smaller customer base.
Northwestern Industries Inc. of Seattle serves as one of Tower’s regional suppliers. Rick Nelson, NWI sales manager, says listening to customers proves critical in today’s climate of rising prices.
“If our customers tell us when the job is going to go, then we will try to do our best and price-protect it. We pad the quotes to allow for that,” he says. NWI continues to price-protect quotes for up to a year, he adds.
If the contract glazier does not provide the job schedule prior to the quote, NWI only guarantees the price for 90 days, even with a letter of intent, Nelson says.
“If we bid in January and they send us a letter of intent in March, we can’t guarantee that beyond 90 days, because we quoted it based on January’s pricing,” Nelson explains. “It’s hard to go back and ask for more money. … But we have to put the responsibility back on them. They have to tell us when it’s going to go first.”