The Art of the Purchase, Part 1

New Project Start Up: Plan Review, Scopes of Work and Material Specifications

By Mark Henderson

When preparing for the start of a project, there are several crucial tasks a builder must perform: 

• Review plans
• Refine the Scopes of Work (SOW)
• Create the Material Specifications
• Develop bid pricing documents
• Decide what will be offered as standard options
• Set up the purchase order database
• Provide instructions to bidders
• Assemble the preferred trade partners list for bid. 

In this first part of "The Art of the Purchase," I will address the importance of integrating the Plan Review, the Scopes of Work and Material Specifications into one process, and how this process will lead to a more predictable budget as well as lower the variance purchase orders on a project.

Plan Review: The plans for a project drive the rest of the purchasing process. Thus, plan review is the first step in assuring you will be able to execute an accurate bid process. This process begins when the plans are around 80 to 90 percent complete since purchasing is not normally involved in the design phase. Although it is the architect's responsibility to make sure your particular plans meet all the required municipality codes, it is imperative that you also verify these plans are in compliance.

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Validating and Mitigating Price Increases

Are you currently experiencing a barrage of price increase letters from your trade partners or material suppliers? Feeling the pain of lumber market increases that result in your frame, panel and siding pack cost rising? You're not alone, and there are many proven strategies to quantify the increases, sort out the false information and mitigate the real increases.

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In June, nationwide housing production rose by nearly 7 percent to a seasonally adjusted annual rate of 760,000 units, according to figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the fastest pace of new-home construction since October 2008.

And builder confidence in the market for newly built, single-family homes is up by six points to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July. The rise is the largest one-month gain recorded by the index in almost a decade and also the highest HMI since March 2007.

"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, NAHB chairman and a home builder from Gainesville, Fla. "This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable."

We thought it would be additionally helpful to share with you what we're hearing from our own experts who include some of the best and brightest working in different facets of the home building industry.

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 When it comes to plumbing a home with crosslinked polyethylene (PEX) tubing, conventional thought often leans toward homerun installations. However, there is growing realization that a homerun configuration - while a viable option for some installations - is not the ideal solution for every house.

An alternative plumbing concept rapidly taking hold in residential installations is something called "Logic Plumbing". The Logic approach uses PEX tubing connected to closed-end and/or flow-through multi-port tees located near fixture groupings. Individual branches extending from a single multi-port tee provide water to all fixtures in a single or adjacent grouping. This layout results in greater labor savings because it is not necessary to "cut in" several conventional single-outlet tees - a multi-port tee can do the same job.

Builder Partnerships recently surveyed our members regarding their relationship with suppliers about specific building products: appliances, lumber yards and cabinets. 

Of our respondents, the average number of homes they will close in 2011 is 53, making this a good spotlight on the small- to medium-sized home builder. Here are the results:

Emser Introduces a New Metal Tile Series

Inspired by the fabled European castle and court of Camelot, this new metal series of tiles from Emser recalls the court's fantastic splendor as well as the idyllic beauty of its natural surroundings. Available in coordinating 4-inch by 4-inch Decos, 2-inch by 2-inch Dots/Inserts and 1-inch by 12-inch Liners.

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