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#162389 - 04/18/07 02:26 PM Escalation Clause
Last Leg Offline
Member

Registered: 05/04/05
Posts: 41
Loc: Houston, Texas
Does anyone else have Escalation Clauses as part of their proposals? With wire prices so volatile, we put one in about a year ago and, boy do we get flack! It just seems more would be doing it rather that taking a big hickey on a job.

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#162395 - 04/18/07 03:12 PM Re: Escalation Clause [Re: Last Leg]
Tiger Offline
Member

Registered: 05/04/05
Posts: 714
Loc: Crystal Lake, IL USA
I understand why you'd want such a clause, but would it be needed if you purchased materials when the contract was signed?

Dave

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#162414 - 04/18/07 10:43 PM Re: Escalation Clause [Re: Tiger]
macmikeman Offline
Member

Registered: 07/16/02
Posts: 718
Loc: Honolulu, Hawaii
Tiger, I had a single project that lasted 5 years. An escalation clause is a very good clause for any extended projects, specially with the current trends in copper pricing. Thankfully we did not need it so much back then.

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#162446 - 04/19/07 07:48 AM Re: Escalation Clause [Re: Tiger]
ITO Offline
Member

Registered: 11/26/06
Posts: 341
Loc: Texas
Originally Posted By Tiger
I understand why you'd want such a clause, but would it be needed if you purchased materials when the contract was signed?

Dave


This is pretty much how I handle it too. The only problem I have with this solution is making sure I can get paid for stored material before I sign the contract.
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#162460 - 04/19/07 10:48 AM Re: Escalation Clause [Re: ITO]
Last Leg Offline
Member

Registered: 05/04/05
Posts: 41
Loc: Houston, Texas
Okay, so when you get a job with say 10 - 20 200 Amp+ feeders, do you just buy a little extra in case of obstacles? I can see when it is mostly same size conductors... I guess you all have warehouses large enough to store several large project? - well, large being 200 - 800K range.

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#162463 - 04/19/07 11:21 AM Re: Escalation Clause [Re: Last Leg]
GETELECTRIC Offline
Member

Registered: 10/22/03
Posts: 178
Loc: toronto canada
Buying all your material at the start is good for a small job but on a large one not practical because you only get payed for what is on site and your feeders may not be required for 6 months,and most won't ok this.

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#162466 - 04/19/07 12:43 PM Re: Escalation Clause [Re: GETELECTRIC]
ITO Offline
Member

Registered: 11/26/06
Posts: 341
Loc: Texas
On a lot of contracts if you have a bonded warehouse, there is an avenue for drawing on stored materials. Generally speaking I buy all my wire, raceway, fixtures, and devices shortly after getting back my approved submittals.



Edited by ITO (04/19/07 12:52 PM)
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#162474 - 04/19/07 01:45 PM Re: Escalation Clause [Re: ITO]
scameron81 Offline
Member

Registered: 02/24/04
Posts: 80
Loc: Healdsburg, ca, USA
We have an escalation clause in all our contracts. we a lot of longterm jobs that drag out forever and purchasing material ahead of time isn't usally practical for us. A lot of the jobs are always contantly changing as well which makes up front purchases hard. It has been pretty well received by our customers. The main thing is making sure you have some kind of documentation to prove it.

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