Contract Risk for Escalation Costs
Post date
May 09, 2019
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By Andrew J. Natale & Aaron S. Evenchik, Construction Law Insights Blog of Hahn Loeser & Parks LLP.
Steel and other construction material tariffs necessitate careful evaluation and allocation of project cost and schedule risks. For example, when steel costs increased suddenly based solely on presidential executive orders, the building trades and owners saw drastic increases in costs, shop drawing review times and delivery dates. In many instances, contract documents failed to account for such risks.
Another factor that can significantly increase the price of material, and even the market price for labor, include catastrophic weather events."