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Escalation Clause #162389 04/18/07 04:26 PM
Joined: May 2005
Posts: 41
L
Last Leg Offline OP
Member
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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Re: Escalation Clause [Re: Last Leg] #162395 04/18/07 05:12 PM
Joined: May 2005
Posts: 706
T
Tiger Offline
Member
I understand why you'd want such a clause, but would it be needed if you purchased materials when the contract was signed?

Dave

Re: Escalation Clause [Re: Tiger] #162414 04/19/07 12:43 AM
Joined: Jul 2002
Posts: 717
M
macmikeman Offline
Member
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.

Re: Escalation Clause [Re: Tiger] #162446 04/19/07 09:48 AM
Joined: Nov 2006
Posts: 348
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ITO Offline
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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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Re: Escalation Clause [Re: ITO] #162460 04/19/07 12:48 PM
Joined: May 2005
Posts: 41
L
Last Leg Offline OP
Member
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.

Re: Escalation Clause [Re: Last Leg] #162463 04/19/07 01:21 PM
Joined: Oct 2003
Posts: 172
G
GETELECTRIC Offline
Member
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.

Re: Escalation Clause [Re: GETELECTRIC] #162466 04/19/07 02:43 PM
Joined: Nov 2006
Posts: 348
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ITO Offline
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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.


Last edited by ITO; 04/19/07 02:52 PM.

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Re: Escalation Clause [Re: ITO] #162474 04/19/07 03:45 PM
Joined: Feb 2004
Posts: 75
S
scameron81 Offline
Member
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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