Heavy Highway Contractor

  • 1.  Purchasing materials in bulk

    Posted 07-18-2018 11:50
    We have a job that requires 1500 tons of rebar over a 3 year period.  we are facing price increases if we purchase as needed during the job.
    We would need to borrow funds to purchase in bulk now.  Has anyone executed purchase contracts with suppliers to control costs with payment terms?

    thanks

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    Richard Gavin CCIFP
    Chief Financial Officer
    CAC Industries, Inc.
    Long Island City NY
    (718) 729-3600
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  • 2.  RE: Purchasing materials in bulk

    Posted 07-19-2018 10:32
    Most every long-term PO that we have with material suppliers has an escalation charge built into it that comes from their quote when the job is bid. Some project owners will allow you to bill for stored materials which would allow you to purchase the materials up front and get reimbursed for the material costs before they are incorporated into the project. The remaining issue would be where to store the materials. If you have room on the project site you can do it there but usually the supplier will allow you to store them on their site at little on no additional cost.

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    Thomas Lowrey CPA
    CFO
    Scott Bridge Co., Inc.
    Opelika AL
    (334) 749-5045
    tlowrey@scottbridge.com
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    Original Message


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