Adjusting To The High Cost Of Material
Julius Ballanco, PE
It was not surprising to read the latest business economic report on the cost increase of copper for the past year. The national average increase was 32 percent. All of you watched as copper took a sharp increase, but it wasn't until they put the 12 months' numbers together that it looked so drastic.
In the same report, PVC plastic pipe also was identified as a material having a 20 percent increase in price. The PVC prices are related to the increase in the cost of oil. Of course, everyone is aware of the steel price increases which have impacted steel pipe. Engineers still have a tendency to specify galvanized steel pipe for water distribution systems when the pipe size is 3 inches or 4 inches and larger in diameter.
The report also listed the national average of wage and benefits for a union plumber as being $40.85 per hour. This is an increase of 3.4 percent. The highest wage rate listed was New York City with a rate of $68.42 per hour, and New Orleans was the lowest rate at $25.41 per hour. I don't mind seeing the labor costs going up, but I get concerned when the material prices far outpace the rise in wages.
The increase in copper and steel prices can play havoc on bidding larger projects. You may bid today and see the prices jump next month when the project begins. Architects and engineers have a tendency to add language to project specifications that prevent any adjustment of dollar amounts of the submitted bid. They normally require you to hold your bid price for up to 90 days.
Of course, you can take out your crystal ball and try to predict what the price of copper, steel and PVC will be when the project starts. However, when your competitor doesn't use his or her crystal ball, you may lose the bid because he or she submits a lower price.
I have a project about to start that will use 2,500 feet of copper tubing, ranging in size from 1/2 inch to 3/4 inch. One of the options offered to the bidders was the submittal of a bid based on a given price of copper tubing. If the price of copper tubing goes up, the cost of the project would increase accordingly.
Not all engineers will allow this price adjustment, although you can include it in the bid submittal. All the project manager can do is reject the bid if they don't like the pricing structure. But it provides an alternative to losing money on a new project.
A bid based on piping prices at the day of the submittal has a double-edged sword. If the prices of copper, steel or PVC go down, the construction price also goes down. So think it through as to whether you want to go that route. If you choose the crystal ball method of pricing piping, don't complain when the cost of material increases. You can't have it both ways.
Change In Material & Labor OptionAnother option available is a change in piping material. When permitted by the specifications, project manager or developer, lower-cost piping material can be substituted to avoid having a loss in profit on a project. CPVC has seen a bump in use with the increased cost of copper tubing. However, CPVC is not always accepted for larger pipe sizes on a project. Also, some projects do not permit a change from a metallic material to a plastic material.
Various manufacturers are promoting labor-saving concepts for installing piping systems. If the labor savings can truly be realized, this is another way of combating the changing price of materials.
However, the labor-saving installation method may already be specified by the engineer.
One manufacturer is promoting a clever way of dealing with the higher copper tubing prices. They still promote using copper tubing for larger diameter installations (with a lower-cost installation method). Then, for smaller diameter installations, they recommend converting to a manifold installation using PEX tubing.
The manifold would be installed when the pipe sizing drops below 1 inch or 3/4 inch in size. The run out to the fixtures or appliances would be in PEX tubing with two connections: one at the manifold and one at the fixture.
This is a first in the industry, since we normally hear of promotion of all copper or all CPVC or all PEX tubing for water piping installations. It makes perfect sense to use multiple piping materials on a water piping installation. We already do this in hydronic piping installations, especially radiant piping systems.
I was curious as to how much of a savings this would accomplish. I wasn't surprised when the switch to a PEX manifold for fixture connections saved enough in the cost of installation to more than offset the 32 percent increase in copper tubing.
While it was not suggested by this manufacturer, I guess you could also use CPVC for larger diameters and switch to PEX manifold for smaller sizes. The problem is that there are not readily available conversion fittings that switch from CPVC to PEX
Finally, one of the options being used by some contractors is the redesigning or resizing of the water piping system. Yes, engineers have a tendency to oversize water piping systems. Sometimes there are reasons for the oversizing, such as reduction in the noise, controlling water hammer, design of valve stations, and plans for future installations.
Contractors have a tendency to undersize. The problem with sizing water piping installations is that undersizing is far worse than oversizing. Oversizing just wastes some material; undersizing can reduce the life of pipe, fittings and valves, change the pressure drastically, reduce the flow rate at remote outlets, and reduce the performance of flush valves and pressure-balancing valves.
So, if you are going to consider reducing the size of the water piping to save some money, deal with an engineer. This will avoid getting you into trouble with an undersized piping system. It is far more costly to correct an undersized piping installation than the potential loss of profit because of increased piping costs.
Let's just hope that the piping material costs come down as quickly as they went up. It sure would make life easier to estimate a project correctly.