Material Cost Calculation

Loretta - The LEED Reference Guide is very clear about costs: “Materials costs include all expenses to deliver the material to the project site. Materials costs should account for all taxes and transportation costs incurred by the contractor but exclude any cost for labor and equipment once the material has been delivered to the site.”

Typically a steel fabricator buys steel from various suppliers and makes the shapes, angles, etc. a job needs. This in-house labor is part of the finished product cost (structural steel unique to the job) and it - along with the cost of freight and taxes - should be part of the material cost that goes into the numerator of the equation for MRc4. As the GC, you should be getting the cost of the material and the supplier’s overall cost. Typically these are different numbers between material costs and a subcontractor’s cost but if it is a supplier and they don’t do any steel erection and just supply the steel, the numbers could be the same.

I am puzzled why a supplier would not want to get credit where credit is due, so to speak. If you cannot reason with the supplier to tell them they are missing having their material count as its full worth, I’m not sure if your approach is the best. I would err towards including the full $1M in the numerator and in the denominator - and that might be easier to justify than leaving out something in the denominator. As the GC, you know what they charged you and what services they provided (as well as the LEED requirements) and could more easily justify this approach, IMO.

P.S. It's been several years since I worked with Crossland on the Erie High Charter School job but I don't think we met then.

I would agree with MIchelle's comments. As a steel supplier, we're generally at the opposite end of the spectrum where we know what steel we've produced but not how much ended up on the project site. That means our documentation generally includes all the information except costs. Our expectation is that a fabricator or sub-contractor would use our documentation as backup/confirmation for the "form" (or whatever the GC requires) for the project. They would then include their cost of fabrications (including freight, value-added and markup).

Is it possible what you have is the steel producer (or service center) documentation which outlines what they have sold to the fabricator? If so, the fabricator may be just passing it along to you without going thru the process of determining what value they bring to the job. That said, I'd be surprised if a project of that size was sourced all from the same steel producer. It'd be extremely unlikely (probably impossible depending on the fabrications) to get all the steel from the same mill. It WOULD be possible to source it all from the same service center however.

Anyway, sounds like a fabricator that doesn't fully understand the credit or some other confusion on how the materials have been documented.

Your fabricator supplied "almost a million dollars" worth of fabricated steel components to the project. What you need to do is deternine how much of that is recycled content - more accurately, how much is pre-consumer and how much is post-consumer content.

We can provide a breakdown by product (mill) type. And further breakdown by specific mill. I also suspect that most steel producers here in North America can provide similar documentation to your fabricator. Then it's just a task of "doing the math".

For example, our bar mills (rebar, angles, flats, rounds, etc.) all operate using 99.9% recycled content (0.1% is alloying material which is considered virgin). Further 83% of that is considered post-consumer and 17% is considered pre-consumer. Which means you take 99.9% of your total steel fabrication invoice total and that is your "total recycled content". Then take 83% of that number to get your post-consumer and the remainder (17%) is pre-consumer for which you get half value.

You'd do that for each steel type sourced by a different mill/supplier. Sounds like a lot of work but since the fabricator has the whole BOM already broken down, they've done the majority of the work already. They should be able to provide you a source for each steel type and the mill documentation from their vendor. For anything that documentation is not avaiable you can assume 25% is post-consumer recycled content.

The process is largely the same for MR5 and I'd recommend doing both concurrently. Many times the mill documentation will include data for both credits.

Feel free to contact me if I can help further - keith.lindemulder@nucor.com

Keith - I am so glad you subscribe to this forum and provide such information and helpful posts!!! Thanks for offering the personalized assistance to Loretta.

We have worked with a few steel fabricators who have become pretty good at getting us the info that we need for MRc4 & MRc5. They give us spreadsheets listing the following:

1. Total steel assembly cost, as delivered, including fabrication.
2. Fabricator’s shop location.
3. Bill of materials quantifying (by weight, not cost) all components by source (steel mills).
4. Locations & post-, pre-consumer recycled percentages for each steel mill (based on mill data attached to the submittal).

The spreadsheet then calculates each component’s percentage of the total weight of all components, multiplies those percentages by the total assembly cost to get a cost for each component, and figures the recycled & regional contribution for each.

Timing may be an issue. Remember that fabricators usually cannot provide complete costs & quantities until after shop drawings have been approved, steel has been fabricated, painted, etc., and the fabrications have been delivered to the Site. Also, gathering all this data can be time consuming & laborious. Fabricators may balk if the Project’s LEED Submittal Specifications do not explicitly require the extra documentation. If it’s not in the Specs, the fabricator may not have budgeted for the extra time.

Since steel can contribute significantly to MRc4 & MRc5, we try to make sure that our steel Specification Sections state clearly what documentation is necessary, as well as the timing of the submittals. We do the same with other big-ticket, multi-component assemblies that are fabricated off-Site.