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It was the kind of project that most small glazing contractors could only dream of landing. But in February, Trainor Glass Co. decided to try to defy the odds. It went ahead and bid on a $4 million contract to provide the interior glasswork on all 30 floors of PricewaterhouseCoopers' new offices at 300 Madison Ave.
By the time Trainor won the contract six weeks later, though, the cost of the project's stainless steel parts had jumped by nearly 15%, taking a significant bite out of Trainor's slim profit.
"This is our biggest contract to date in the New York market," says Glen Burger, an account executive at the Chicago-based firm, which entered the local market only five years ago. "Costs are ballooning on a daily basis."
As prices for key raw materials soar nationwide, New York City's contractors, construction companies and developers are battling over who will have to foot the bill. In a few cases, developers are even delaying their projects.
"Escalating material prices are really shaking up the market," says Bob Barone, a senior vice president at Inspection & Valuation International, a consulting firm to investors on a dozen New York City development projects.
The biggest problem is steel. In the past year, raw steel prices have jumped by 75%, hitting $700 a ton recently. Subcontractors say that the soaring cost of raw steel is now showing up in products like...