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Apr
27
2011

Construction Materials Costs Being Driven Up by Surging Fuel Costs

Posted by in Contractor Factoring

We have all seen the gas prices marching upward, this is also true with the diesel costs as well.

From the Resource Monitoring Services (RMS) perspective, anticipating changes in estimated costs is important as we sign on new work. Understanding how fuel increases could affect our current clients is just as critical. Please pay close attention to our dump fees and the wait time charges- from the cement suppliers. I know as fuel increases linger…. Invoicing can also increase due to a variety of surcharges. These increases seem harmless but the cumulative affect can really throw a budget out of whack.

Identifying any invoice increases due to extra charges…..Underscores the value our RMS service provides and informs our clients this cost needs to be offset by:

a)     Changes in engineering practices- finding a more efficient process to complete a specific task.

b)     Improved scheduling- reducing the cement truck time on site will lower the “wait time” charges.

c)      Re-visit bids from vendors- For example: The wide range of dump fees constitute not only waste disposed but also time and cost to perform the task…. A company that has several clients in a specific radius could waive the uptick in fuel surcharges because of client proximity. This particular vendor is not very transparent when it comes to reducing costs. Size of onsite container, quantity of visits per month, compared to contract requirements all affect the job budget.

As we prepare our backup for funds requests it is always our practice to identify items that don’t fit the norm. This is one area we need to spot check to help our clients know what has changed and how they can be pro-active to offset those new costs.

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