COLUMBIA - Rising material costs have forced those working on the renovation of the Daniel Boone City Building to adjust the way they do business.
When K&S Associates, a Nashville company with an office in St. Louis, won the contract for the final two phases of the $21 million renovation, the company had to list the expenses for the entire project up front.
"When we bid projects, price is firm, no matter how long the duration of the construction," Assistant City Manager Tony St. Romaine said.
That pricing structure can be a challenge for construction companies. Richard Librach, vice president of field operations for K&S, said the construction materials market has been volatile for some time now. A few years ago, plywood and lumber prices became very unpredictable, and light-gauge metals soon followed suit. Now prices for copper, flooring material and structural steel are also on the rise.
The second phase of the city hall renovation, which involves the construction of a five-story addition to the Boone building's east side, involves heavy amounts of structural steel. Steel prices in particular are very difficult to predict, and the situation has forced K&S to adapt.
"When we build a job for a two-year project, that's where it gets difficult for us," Librach said. "Manufacturers will also tell you what's anticipated, but you can't always trust that. We're seeing a lot of product volatility."
While K&S generally tries to delay buying materials until they are needed during the project, Librach said there are many materials for which manufacturers will not hold prices.
"That inability to hold prices puts us in the position where we have to procure materials in advance," Librach said. "We end up double-handling the material. Instead of just shipping it once, we have to put it in storage and ship it again to the job site."
K&S anticipates buying in advance and storing materials for the second phase of the city hall project. Although shipping the materials doubles costs, Librach said K&S can't risk delaying purchases because of the dramatically higher prices that might result from waiting.
The third and final phase of construction, which will concentrate on the building's interior and facade, will involve very little steel.
Librach said the rising cost of petroleum products also has contributed to the volatility of pricing in the construction materials market.