corresp

October 18, 2004

Jennifer Thompson
Staff Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0404


		Re:		Form 8-K Item 4 Filed September 15, 2004/Schuff International, Inc. File #001-14763

Dear Ms. Thompson:

On behalf of Schuff International, Inc. (the “Company”), we have reviewed your letter dated September 29, 2004 and respond as follows. Note that the paragraphs in our response are numbered so as to correspond with the comment number in your letter.

1. Set forth below is a discussion of the relevant contract terms, the accounting literature, and other factors that resulted in the Company’s decision to record an adjustment to reduce revenue by $1.25 million in connection with the Company’s 10-Q for the quarter ended September 30, 2003. In summary, the Company was engaged to provide services under two separate contracts in connection with the construction of a professional football stadium for the Arizona Cardinals professional football team in Maricopa County, Arizona. The first contract involved work to be performed at the original site proposed for the stadium, a site that, due to political pressure, was eventually abandoned in favor of a second site. The second contract involved work at the second site on the same project, although the scope of the work, the terms of the contract, and the design of the stadium differed from the scope, terms, and design involved with the first contract.

The Company does not believe that it should amend its recently filed Form 8-K to include the additional information set forth below for the following reasons:

(a) The “disagreement” was based on a legitimate difference of opinion regarding an analysis of the factors set forth in Statement of Position 81-1 – Accounting for Performance of Construction-Type and Certain Production-Type Contracts (“SOP 81-1”) – whether those factors dictated accounting for the two contracts discussed above as a single combined contract or as two separate contracts.

Jennifer Thompson
Staff Accountant
Securities & Exchange Commission
October 18, 2004
Page 2

(b) After consultation with its auditors and its own Audit Committee, the Company agreed to account for its work on the stadium project as a single contract, which resolved the disagreement to Deloitte’s satisfaction.

(d) As disclosed in the Company’s Form 8-K and a Company press release, the Company dismissed Deloitte & Touche not because of the “disagreement” but rather to reduce its accounting expenses in the future.

Background of the “Disagreement”

In February 2001, the Company submitted a bid to design, engineer, fabricate and erect a retractable roof system structure for a new stadium being built primarily for the Arizona Cardinals professional football team at a site in Tempe, Arizona. In June 2001, the general contractor for the project authorized the Company to proceed with the design and engineering phase of the project, and in August 2001, the general contractor authorized the Company to purchase steel for the project. As a consequence of significant political opposition to the location of the original site, the stadium authority responsible for the project (the “TSA”) abandoned the Tempe site on December 19, 2001.

In April 2002, the TSA officially changed the site for the stadium to Glendale, Arizona, which is approximately 50 miles from the original site. In connection with the construction of the stadium at the Glendale location, the general contractor asked the Company to design and develop a less expensive roof structure, gave the Company an opportunity to re-bid the contract as a fabrication and erection job only with no design and engineering responsibility, and awarded a new contract to the Company for the Glendale site.

Initially, based on an analysis of the factors outlined in SOP 81-1, the Company adopted the position that its initial work at the Tempe site and its subsequent work at the Glendale site should be accounted for as two separate contracts. The Company’s initial position was based primarily on the following considerations:

• the significant delay between the original bid for the Tempe site and the subsequent bid for the Glendale site;

• the different scope of the work involved at the two sites;

• the different risk factors associated between the two contracts; and

Jennifer Thompson
Staff Accountant
Securities & Exchange Commission
October 18, 2004
Page 3

• the unusual circumstances regarding the termination of the original contract.

In addition, the Company believed that the general contractor and its bonding company recognized the work related to the two separate sites as separate contracts. The Company also believed that the documents entered into between the Company and the general contractor were separate legal obligations. Finally, the financial statements of the TSA reflected a loss on abandonment of the Tempe site.

In September 2003, the Company was planning to finalize the accounting related to its work on the original site based on the assumption that the original contract had been terminated concurrently with the Company’s agreement in principle to revised terms concerning fabrication and erection of the project at the Glendale site. Prior to the resolution of all claims between the Company and the general contractor, the Company had determined not to recognize all of the income from the original contract because, in accordance with ¶ 25(c) of SOP 81-1, the final outcome was impractical to estimate until negotiations could determine whether there would be termination damages or other claims. As a result of the Company’s original position that the work involved with the original Tempe site was performed under a separate contract from the work to be performed with respect to the Glendale site, the Company initially booked approximately $8.4 million in revenue attributable to the original contract.

However, after discussions with its auditor, Deloitte and Touche, and a review of the guidance provided by SOP 81-1, the Company amended its initial position and elected to account for the work performed at the Tempe site and at the Glendale site as part of a single project. The Company adopted this revised position based primarily on the following factors:

• the two contracts closely related to a single project (the Arizona Cardinals professional football stadium);

• both contracts were for the same customer/owner (the general contractor and the TSA);

• the original contract for the Tempe site was not closed-out until September 2003, when the Company reached an agreement in principle on the revised terms associated with the Glendale site;

• a significant portion of the steel acquired in connection with the Tempe site would be used at the Glendale site, with certain modifications; and

Jennifer Thompson
Staff Accountant
Securities & Exchange Commission
October 18, 2004
Page 4

• the new price for the project included services performed under the original scope of the project but deducted amounts already paid for those services to arrive at a revised price.

As a result of adopting this revised position to account for the two contracts as a single contract for accounting purposes, the Company, which recognizes revenue on the percentage of completion method, made an adjustment to reduce revenue for the third quarter of 2003 by approximately $1.25 million.

2. The Company has filed a Form 8-K providing the disclosures required by Item 304(a)(2) Regulation S-K regarding the acceptance of the engagement by McGladrey & Pullen LLP (“McGladrey”), effective October 5, 2004.

3. The Company confirms that it has not consulted with McGladrey, through the date of this letter, regarding (a) the application of accounting principles to any specified transaction, whether completed or proposed; (b) the type of audit opinion that might be rendered on the Company’s financial statements; or (c) the matter of the disagreement with Deloitte discussed above.

In responding to your letter, the Company acknowledges that it is responsible for the adequacy and accuracy of the disclosure in its filings with the SEC; that the Staff’s comments or any changes to disclosure in response to the Staff’s comments in filings reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filing; and that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Sincerely yours,

Snell & Wilmer

/s/ Richard B. Stagg

Richard B. Stagg

RBS:cp

	•		the significant delay between the original bid for the Tempe site and the subsequent bid for the Glendale site;

	•		the different scope of the work involved at the two sites;

	•		the different risk factors associated between the two contracts; and

	•		the two contracts closely related to a single project (the Arizona Cardinals professional football stadium);

	•		both contracts were for the same customer/owner (the general contractor and the TSA);

	•		the original contract for the Tempe site was not closed-out until September 2003, when the Company reached an agreement in principle on the revised terms associated with the Glendale site;

	•		a significant portion of the steel acquired in connection with the Tempe site would be used at the Glendale site, with certain modifications; and