Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Richard Wesolowski of Sidoti & Company.
Richard Wesolowski – Sidoti & Company
Thanks, good morning.
James Allen
Good morning Rich.
Pat Manning
Good morning.
Richard Wesolowski – Sidoti & Company
On the steel subject, aside from just the attractive price that I was assuming you would get from the supplier, I was also under the impression that they were providing firm quotes for a period into the future which helps you out on most of your bids, is that still the case?
Joe Harper
Yes, it is the case Rich, but the way the steel industry functions is through distributors, who as I understand are most of the time not able to get firm pricing from the mills. So, in this case, that order was placed with a supplier with whom we had done business for over 25 years. The change in steel price was so dramatic that we were convinced he would not survive it financially. He told us I can do it, I am bankrupt and we renegotiated with him.
Richard Wesolowski – Sidoti & Company
Okay. I look at that situation, I compare it to what looks to be a surprisingly strong bidding environment for these $100 million plus type of jobs, do you think you will have to shoulder more commodity risk in order to bid these out?
Joe Harper
Yes, we turned in on $220 million last week that had a very large steel component on it and we were able to obtain from a Texas steel manufacturer pricing that was firm but had escalators built into it. Now, that’s a pretty comfortable situation because we are able to weigh out our schedules and determine when we can take delivery of the steel and therefore build into our pricing those kinds of impacts. But because it was a 2.5 or a 3-year project, there was a lot of commodity risk in our perception and we put very comfortable pricing in there in our opinion.
Richard Wesolowski – Sidoti & Company
So, you are in the job so long as it goes on schedule you wouldn’t have any real commodity risk?
James Allen
Better believe in that.
Joe Harper
Yes, that’s correct.
Richard Wesolowski – Sidoti & Company
I was a little confused by the press release, were the less than satisfactory results on the Dallas projects connected with the steel or is that a separate issue?
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