Hoarding, Cost Increases, and Risk; OH MY!

Remember when the pandemic hit, and everybody collected toilet paper? It’s happening today with subcontractors and vendors throughout the trades (not TP; material like rigid insulation, ductile iron pipe, copper pipe, drywall, lumber, metal studs, coiled steel, etc., etc.). Material price surges, a continuing supply chain roller coaster, and the omicron variant have us all guessing how long to receive and how much material will cost when it is finally installed on the job site. An extended construction duration and price increase pass through are deal breakers for us at The Douglas Company, so we are tested to come up with alternate methods to deal with the aforementioned challenges.

Our advanced procurement of construction materials and equipment soon after a contract is executed and well before the equipment or material is needed, is a sensible practice which assures that specified materials and equipment are available for installation or use in accordance with the construction schedule. Proactive procurement also guards against escalating costs, particularly in long-term contracts, enabling The Douglas Company and its subcontractors to make timely purchases when shortages may be a problem. Practical owners will encourage the sensible practice of early materials acquisition by making payment for such materials an easily available option.

Timely payment of subcontractors is something that The Douglas Company takes great pride in and works very hard at. This is critical if the project is to be delivered in a timely manner; ahead of schedule, and under budget.  

Risk is everywhere. Controlling it is what we do. I’ve been told we are an accounting firm that runs a construction company. This comment has only been amplified as we work together through this unchartered supply chain circus. There are plenty of predictions out there that would back up the idea that these issues are only going to get worse but we are more ready now than ever to tame the “bull” whip.

Landon Kessler

Project Manager 

The Douglas Company

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