19th May 2021
Last month the Construction Industry Council warned that due to high demand, certain construction materials were in short supply. Steve McCombe, a consultant in Thrings’ Construction and Engineering team, discusses the impact on construction contracts.
The pressures on the construction industry never seem to end. Those parts of the industry that have survived Brexit and the Covid-19 pandemic are now having to deal with a severe shortage of key products which is resulting in price increases and project delays.
This problem is on a global scale and has not only been widely reported by construction media outlets but also by broadsheets and members of the popular press. Frequent price rises for essential products - including timber, steel and insulation - have been reported by suppliers and contractors, and lead times have ballooned.
Tendered prices and programmes will have to reflect likely shortages, including increased lead times, the possibility that more readily available alternatives may have to be purchased, and price rises.
If an existing construction contract includes an agreed completion date and a fixed price, unless it also includes provisions allowing for that date and/or the price to be altered due to problems experienced with product shortages, time and cost adjustments will not be possible.
If you would like advice on potential and/or ongoing construction contracts, including those where the time and cost implications of any materials shortage need to be considered, please contact Steve McCombe or another member of Thrings’ Construction and Engineering team.