FAQs

When you work with The Purchasing Department we manage all material handling and can control project costs by:

1. Reducing over-ordering because exact quantities are determined by the takeoff. We estimate that cost reduction can be 10% or more. The takeoff quantities also help reduce or eliminate the typical 10% material contingency fee.
2. Eliminating supply chain mark-ups from Subcontractors and GCs. This can be 10% to 20% or even as high as 40% or more of material costs.
3. Reducing product waste by tracking material usage and against actual materials purchased. Cost reduction can be 10% or more.
4. Eliminating fraud and theft by tracking all purchases against the material takeoff. Cost reduction can be 10% or more.
5. Increasing labor productivity by letting the General Contractor focus effort on labor while we handle all material purchasing.

We estimate there is a 10% to 15% increase in labor productivity under this arrangement.

Purchasing-as-a-Service™ (PaaS™) is our proprietary technology platform used by our Onsite Field Service Reps and our Central Office Experts to provide Owners, Investors, Insurers and Lenders an innovative, full-service purchasing and inventory management system for managing the cost of materials related to both their residential new construction or renovation projects.

Working with The Purchasing Department won't cost you any more than what you currently pay your General Contractor (GC). For example, let's say you have a contract with your GC for $300,000: $200,000 for labor and $100,000 for materials, with a 20% GC fee. That's a total of $60,000 in GC fees. If you separate labor and materials, the fees remain $60,000. The Purchasing Department will manage materials for $20,000, and your GC would manage labor for $40,000. The big difference is that you’ll benefit from more Cost Control, Transparency, and Oversight through our Purchasing-as-a-Service™ (PaaS™) - something your GC can’t provide.

After signing our Purchasing Services Contract, you are assigned a dedicated team of material management professionals responsible for the planning, shopping and monitoring all materials for the life of your project. Starting with determining quantities needed, buying the right materials, delivering those materials before they’re needed, controlling theft, maintaining lien waivers, reporting budget to actual cost by task, and leading to our unique Percentage of Completion methodology. The purchasing team will manage all purchases necessary to complete your construction project and keep the real time PaaS CRM platform updated.

Typically, Subcontractors buy materials and add a markup, which the General Contractor (GC) then further marks up and passes on to the customer. In contrast, The Purchasing Department buys directly from suppliers and manufacturers which removes the layers of added costs and potential conflicts between the GC's and investor's interests. Our PaaS technology promotes transparency and accountability, ensuring that materials are purchased at the most competitive prices while eliminating multiple markups throughout the project supply chain.

Our Quantity Engineers prepare a material takeoff by determining the exact quantity of materials needed for each phase of your construction project. This is done by using architectural drawings provided by the client or if drawings are unavailable, using data from our onsite mobile app. The takeoff calculation is based on the actual square footage of the building.

The material takeoff is key to purchase planning. Our engineers and procurement specialists, in our central office, use material takeoffs to accurately purchase materials. They also use them to monitor and compare actual usage to takeoff estimates. Since we know the sequence of materials needed for each construction phase, we plan purchases and deliveries to get the right materials delivered at the right time, reducing financial risk. Then, we also use that same takeoff information to report the real-time Percentage of Completion with variances noted.

We know that there is a direct correlation between the progress of a task and the quantity of materials used for that task. Since we purchase and deliver all the materials, we can easily determine the Percentage of Completion (POC) by taking a physical count of materials on hand. Using our verify-in-field (VIF) inventory method, we assess the difference between quantities bought and delivered versus what's left on hand, accounting for any damages or theft. This gives us a real-time, accurate measure of the material installed and Percentage of Completion.

When a General Contractor (GC) is primarily responsible for purchasing on a project, there's an increased risk of inappropriate purchases and defalcations. In contrast, our system is designed to minimize these risks. We specifically buy materials required for each task, determined by the takeoff, ensuring there's no unnecessary or surplus purchases. Our real-time monitoring of materials on the job site enhances this security. If theft does occur, our system quickly alerts us, facilitating swift action and potential recovery. Additionally, to further ensure transparency and financial accountability, we offer a Purchase History Audit. This can be conducted on either the current project and GC or as a financial post-mortem on any previously completed project.

Removing the materials handling responsibility from your GCs allows your them to focus on labor and installing the right materials at the right time. This will increase labor productivity 10% to 15%. We work with your GCs during the life of your project to make sure there are no out-of-stock situations that would require and emergency visits to a Big Box Store.

Because he is marking it up, or he has materials in storage, or he does not want the intrusion. Either way he is not acting in your best interest. Most General Contractors are usually not experts in all products and materials, so they rely on subcontractors who mark up material purchases to them, and then the GC marks up those same purchases up to you.

YES. We have a reseller license, and since we purchase the same building supplies for many contractors, we are able to negotiate bulk buying discounts beyond what a single general contractor can negotiate. As a result, we develop direct relationships with suppliers, which allows us to buy direct from manufacturers at distributor rates. We currently have access to over 90 manufacturers.

We are the single point of contact for all projects and all materials. We provide uniform purchasing and centralized monitoring across all your projects and General Contractors. Cost control and oversight is as simple as logging into our PaaS CRM platform to find real-time, comparative information on all your projects, General Contractors, and Percentage of Completion by task.

YES. We store and maintain compliance and purchase documents in our online MyStore™ database. This documentation verifies that the materials purchased align with programs such as Star, LEED, Energy Efficient Mortgages, Residential Energy Efficiency Tax Credits, State and Local Utility Programs, and includes all material lien waivers.

Personal choice is key when buying higher-value selection items like light fixtures, plumbing fixtures, and cabinets and we want you involved in choosing those materials. Through our online database, MyStore™, you can track your past purchases and explore a variety of products from various manufacturers that fit your budget. If you switch contractors or sell a property, we store all product details, sourcing, and pricing history for your projects and you can access this information anytime for current availability and pricing. The items you select are then delivered directly to the jobsite.

Yes we do. We offer a guaranteed issue Term Life and Accidental Death ($50,000) and Dismemberment Insurance ($50,000) program for GCs, and Subcontractors enrolled in our independent sales program – absolutely FREE! Home Depot, Lowe’s and Menards all have rewards programs that only allow you to buy more of their products. We’re providing something more meaningful – peace of mind when you buy your materials from us.

Working with The Purchasing Department is simple! Just sign a materials purchase contract and a fee equal to what you currently pay your labor General Contractor. Email us today at: info@thepurchasingdepartment.com