How a 60-Day Price Lock Keeps Your Budget Intact When Approvals Run Long

Every construction project requires the materials and labor necessary to make an idea on a blueprint into reality. Construction procurement is an indispensable element of the process that takes great intentionality and attention to detail to do effectively. 

In this blog post, we’ll cover highlights like how:

• Construction procurement often takes weeks of internal approvals before a purchase order is issued to the supplier.
• Many suppliers offer quotes valid for only 15-30 days, reducing the time available for internal approvals and often forcing procurement teams to restart the approval process. 
• Expired quotes are big disruptors of project budgets and CMAR/GMP contracts.
• OTW Safety offers a guaranteed 60-day price lock, ensuring the quoted price remains valid throughout the approval process.
• Procurement teams are supported when they can avoid things like re-approval cycles, protect their project budgets, and simplify contract management overall (especially helpful with a reliable, repeat supplier!).

We’ll also cover procurement methods in construction, their significance to the industry, and how a 60-day price lock solves many issues procurement teams and contractors face.

What is Procurement in Construction?

An essential element of construction, procurement is the process of sourcing, purchasing, and managing materials, equipment, and services needed for a project. Construction is dynamic, and parts are constantly moving; those on procurement teams are charged with ensuring that their projects receive the correct materials at the right time… and at the right price!  

Those involved in construction procurement are generally responsible for tasks like vendor sourcing, quote comparison, contract negotiation, purchase order management, and supplier coordination. Every decision made in procurement directly affects contract compliance, the project budget, and schedule reliability. Ensuring that supplies are delivered on schedule and that any third-party servicers arrive and complete their work on time, among other things, is integral to maintaining budgets and keeping progress on track.   

Why Construction Procurement Approvals Often Take Weeks 

While impulse purchases happen quite often in daily life, the same can’t be said of construction purchasing. Research and bids must be thorough, and approval stages often take days to weeks to complete, so purchasing decisions rarely occur immediately. 

Common approval stages take significant time, especially when teams and projects are larger, and procurement requests must pass through multiple people before completion. Each stage can involve different people and different suppliers, making each step laborious. For initial quote requests, the estimator must identify required elements such as equipment or materials. From there, vendor comparison is essential to ensure pricing, compliance, and availability align with the project’s scope and timeline. Once vendors are selected and essential supplies are identified, internal approvals require project managers to verify alignment with the project scope and budget. After internal approvals are complete, purchase orders can then be created and issued to the supplier. Because approvals often involve compliance reviews, multi-level signoff, oversight on large budgets, and coordination between procurement, project management, and finance, it is common for approvals to take 30-60 days – especially on large projects.

The Problem with Expiring Quotes in Construction Procurement 

Given how involved the approval process can be, it’s easy to see how issues might arise when a supplier quote expires before it reaches final approval. While the approval process may take 30-60 days, supplier quotes are typically only valid for 15-30 days. 

When this happens in construction procurement, the entire process often has to be restarted. Pricing may have increased due to market changes; a new quote must be issued, and procurement will need to begin internal approvals all over again. This can affect the overall budget, delay the project, require the procurement team to repeat paperwork, and potentially cause supplier frustration due to repeated quotes and wasted time. Unfortunately, this problem is especially common for construction safety equipment and traffic control products, where demand and material costs can fluctuate.  

Procurement Contract Methods in Construction and Why Price Stability Matters

Just as construction projects are varied and require different types of materials, suppliers, labor, etc., so too are the contract methods in construction. An appropriate procurement contract method is essential to maintain efficiency, reduce costs, and have the build completed as desired. Across all methods, the procurement team is responsible for sourcing materials, supplier pricing, purchasing timelines, and contract compliance. The most common types are design-bid-build, design-build, and construction manager at risk (CMAR). 

Design-bid-build

This method is the most widely used of the three noted – a project is designed, a general contractor is hired by the client (generally based on the best bid), the contractor agrees to the budget, and work begins. In this type of contract, the contractor will most often be responsible for a procurement strategy once contracts are awarded.     

Design-build

In a design-build contract, the firm (or contractor) serves as a one-stop shop for both the design process and the construction project. This method has the benefit of every decision being run through a single entity and often offers the advantage of existing supplier relationships and standing pricing agreements. Procurement in this type of contract can also happen earlier in the project lifecycle.  

Construction manager at risk (CMAR)

Similar to a design-build contract, the Construction Manager at Risk (CMAR) method, the construction manager (CM) or general contractor (or a firm) is the point person for a project’s design process. During this process, the CM commits to a Guaranteed Maximum Price (GMP), which is exactly what it sounds like – the maximum amount the client will be responsible for regarding the project. The majority of the risk rests on the contractor’s shoulders, as they are responsible for anything above the predetermined GMP, but this type of contract is often equipped with a larger contingency budget due to potential unexpected costs. This method is often employed for complex projects where early contractor involvement is beneficial to budget and risk control.  

Regardless of the method used, price stability (i.e., a 60-day price lock versus a shorter period) improves budget predictability and increases purchasing confidence.  

How Price Changes Can Disrupt GMP Construction Contracts 

While not all contracts use the Guaranteed Maximum Price (GMP) structure, many contractors and owners/clients with an established relationship will choose to use this “construction manager at risk” model, as trust and prior experience provide a firmer foundation for doing business.   

What Does GMP Stand For?

As noted, GMP stands for “Guaranteed Maximum Price”. This contract framework is often used in construction projects where a maximum price is predetermined and the final project cost cannot exceed that price. Key principles of this structure include project owners receiving predictable budgets and contractors absorbing any costs that exceed the agreed-upon maximum. Cost control with these types of contracts is essential, as a lack of budget oversight could result in a significant cost burden for the contractor at the closure of the project.  

Why Expired Quotes Threaten GMP Budgets

When approval times exceed the validity period of a supplier quote, a GMP budget is at high risk in particular. If a re-quote is necessary and pricing has increased from one or multiple suppliers, procurement may exceed the GMP allowance. When this happens, contractors are required to absorb the unexpected cost increase under the contract. This also means that project margins shrink, specifically when there is little or no contingency left. For safety equipment purchases, even moderate price increases across multiple items can drastically affect project budgets, which is something neither the owner nor the contractor wants.  

How a 60-Day Price Lock Solves the Quote Expiration Problem

Nobody wants to be forced to restart any part of the construction procurement process… but a 60-day price lock is the solution! A price lock guarantees that the original quoted pricing is valid for a specific duration, even if internal approvals take longer than expected.

A supplier quote that is valid for 60 days instead of 15-30 assists a construction procurement team in multiple ways:

• Budget stability is increased thanks to consistent pricing throughout the approval process.
• Fewer revised quotes and budget adjustments reduce the overall administrative work that a team must do.
• Approvals are simplified, as restarting the process is avoided.
• Planning is more efficient – teams can plan purchases with confidence and worry less about price fluctuations 

OTW Safety continually strives to offer customer service that is a step above the rest, and that dedication applies to every facet of our business. We offer a 60-day price lock on all quotes, ensuring that contractors and procurement managers – and anyone else in need of barricades and safety equipment – can be fully confident in the price they receive, even when internal approvals are slow.  

Why a 60-Day Window Works for Construction Procurement

As most construction procurement approvals take 30-60 days, OTW’s guaranteed 60-day price lock ensures budget certainty when obtaining top-of-the-line plastic barricades and safety accessories for perimeter, delineation, and hazard-indication needs. 

Our 60-day price lock covers expected timelines and unexpected delays like:

• Internal review delays
• Contract management processes
• Project scheduling changes
• Financial approvals
• And more

The benefits of a guaranteed price lock are a distinct advantage for procurement in construction. Compared to common 15-30-day quote windows, a 60-day lock appreciably reduces risk when identifying required supplies (and the best supplier for the job), as it ensures the quote remains valid throughout the most common approval process timelines.  

Where Price Locks Fit Into Construction Contract Management

Contract management in construction is the lifeblood of any project. Among the numerous responsibilities of a contract manager, maintaining compliance across several levels is essential. The project budget must be managed precisely, supplier commitments must be upheld, and any cost or scope disputes must be resolved expeditiously.  

While juggling so many crucial pieces, no contract manager wants to find that a previously quoted price has expired and changed due to demand, market values, etc. This is where a 60-day price lock becomes indispensable – it guarantees pricing for 60 days, reduces price volatility, improves vendor reliability, and simplifies procurement documentation. The support and confidence this gives procurement teams in preparing purchase orders is a significant benefit. The locked pricing can be referenced with certainty, and essential elements can be ready and in place exactly when they are required. 

Why Procurement Teams Prefer Vendors With Price Guarantees

A supplier with a price guarantee makes the approval process easier, shows their reliability, and doesn’t keep anyone guessing. This is a huge benefit for procurement teams because it ensures predictable purchasing costs and simplifies budgeting. Fewer approval disruptions and a smoother process also benefit teams by reducing the need to repeat administrative work. Finally, a stronger supplier relationship supports the procurement team, the construction project itself, and the supplier as well – vendors that support procurement workflows often become the first choice for repeat projects.     

How OTW Safety Supports Construction Procurement Teams

OTW Safety knows how important it is to have a dependable supplier and consistent pricing through the entire approval process, and prioritizes reliable procurement support. Because we operate with our customers in mind, we provide top-rated construction barricades and traffic control products – along with essential safety equipment accessories – backed by a 60-day price lock.

The key advantages of that price lock are:

• Quoted pricing is protected
• Re-approval cycles are prevented
• Procurement efficiency is highly supported

At OTW Safety, we are dedicated to being a supplier you can rely on for construction procurement. Our 60-day price lock guarantee policy helps contractors and procurement teams maintain budget accuracy throughout the approval process and ensures that purchasing and procurement workflows run as smoothly as possible. Along with the 60-day price guarantee, we provide accurate and dependable freight costs and delivery times, and excellent customer service. We’re here to support procurement teams from Day 1 to Day 60 of our guaranteed quote pricing, and our 30-plus years in the industry have taught us how to do exactly that.

Ready to get started with a quote guaranteed for 60 days? Our safety experts are ready to create a personalized quote for your procurement needs.   

Frequently Asked Questions

What is procurement in construction?
Construction procurement is the process of sourcing, purchasing, and managing materials, equipment, and services needed for a construction project.

Why do construction quotes expire?
Supplier quotes often expire because material costs, supply availability, and market conditions can change, making long-term pricing difficult to guarantee.

What does GMP stand for in construction?
GMP stands for Guaranteed Maximum Price, a contract structure that sets the maximum cost a project can reach.

Why are price locks important in construction procurement?
Price locks prevent cost changes while procurement approvals are underway, helping teams protect project budgets and avoid repeated approval cycles.

How does a 60-day price lock help procurement teams?
A 60-day price lock gives procurement managers enough time to complete internal approvals and issue purchase orders without risking price increases.