Chairs and Laps Have No Pay Weight Behind Them
You bill nominal plan pounds, you buy laps, drops and accessories, and the tonnage can be dead accurate on a job that still loses money.
Most trades buy and sell in the same unit. A rebar sub buys pounds from a fabricator, bills pounds from a plan takeoff that was never meant to describe what gets purchased, and then pays for placement in manhours while quoting it in tons. Two unit conversions come between your purchase order and your pay application, and neither one is visible until you split the codes.
The size of it
Margin leaks in two places at once: on the pounds you buy and can't bill, and on the manhours it actually took to place a ton. Both are invisible in a single steel line, so the job closes out short with no way to say where.
Pay quantity on a rebar package comes from CRSI nominal unit weights applied to each bar mark on the plans. That theoretical number includes no lap splices, no cutting drops off 20, 40 and 60 foot stock, and not one pound of chairs, bolsters, bar supports, dowel bars or tie wire. Those are real purchase orders with zero pay weight behind them. Then the second mismatch stacks on the first: you bid placing labor at a rate per ton and you pay it by the hour at prevailing wage plus fringes with apprentice ratios you don't get to choose. A P&L that codes all of it to one line called steel will never show you which of the two is bleeding.
Three moves, in order
Step 01: Job cost structure
Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.
What else costs reinforcing steel contractors money
The same mechanism in other trades
What reinforcing steel owners ask
Why does a rebar job lose money when the tonnage was right?
You bill nominal plan pounds, you buy laps, drops and accessories, and the tonnage can be dead accurate on a job that still loses money.
What does it cost?
Margin leaks in two places at once: on the pounds you buy and can't bill, and on the manhours it actually took to place a ton. Both are invisible in a single steel line, so the job closes out short with no way to say where.
What do I do first?
Split the steel line into purchased pounds and pay pounds, then give accessories their own code so chairs, bolsters, dowels and tie wire stop hiding inside bar cost.
What are reinforcing steel contractors supposed to be making?
No survey separates reinforcing steel, so there is no figure of its own. The nearest comparable trade in the reference is Structural steel, which runs 23% gross margin, 15% overhead and 8% net profit before taxes at $1M–$5M, with a CFOS target of 11.5% net. Those are derived figures, not reinforcing steel's own. Read them as the neighbourhood, and read your own job costing as the answer.
Which part of the system fixes it?
The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 of CONTROL: The Construction Financial Operating System.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for reinforcing steel contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.