How to Manage Problems With Cost Increases and Material Shortages

Over the last year, material prices have steadily increased, and it looks like they will continue to do so for the foreseeable future. More recently, materials are also becoming increasingly scarce, with everything from drywall mud, to paint, to lumber. Earlier this year I shared an article about using price escalation clauses to account for material price increases, but I wanted provide some more direct information on how to manage both cost increases and delays. The best way to do this, and in some cases the only way to do this, is through your contract.

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Protect the Bottom Line With a Price Escalation Clause

One of the major headlines in 2020, in construction, that did not directly involve the coronavirus, was the dramatic increase of lumber prices across the country. From April to September 2020 alone, general construction lumber prices increased 130%. Specific types of dimensional lumber increased as much as 158%. And while prices corrected slightly in the beginning of the fourth quarter of 2020, at the end of the year, prices were back on the move upward.

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How to Keep Text Messages from Changing Your Contract Terms

A project manager’s cell phone chirps as she is on a busy jobsite. She glances down and sees that it’s the electrical subcontractor on the project asking a question about running wire in a different location to accommodate another trade’s work. She looks at the plans and texts back that the change is fine and to proceed. The electrician moves forward with the work. The following month, the electrician submits a change order for some additional time and materials required by running the wire in a different location, claiming the change was approved by the project manager. Was it?

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Prompt Payment Statutes to the Rescue

Payment issues can arise on many jobs. Everything goes smoothly at first, the work is done correctly and then suddenly, payment is delayed. A problem promised to be worked out quickly turns into weeks or months of delays, in some cases through no fault of the company trying to be paid. Disputes with other contractors, managers, project owners or lenders can cause delays, and while the parties try to work things out, the uninvolved and unpaid parties are left twisting in the wind.

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NTO Too Late: How to Lose a Lien in 45 days →

If you are part of the construction industry in Florida, no doubt you have at least heard of a Notice to Owner. You probably also know that you have a time limit to serve them and that they impact your ability to record a lien. While this general knowledge is a start, it is no substitute for knowing the actual requirements for an NTO and the consequences for failing to follow them.

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Now Is the Time to Master These Construction Fundamentals →

Over the last three months, much has been written about COVID-19’s impact on businesses in general and construction specifically, and rightfully so. It’s a once-in-a-century, global event that is disrupting every facet of construction, from employees, to safety protocols, to sales, to the work itself. It’s easy to try to focus only on what it takes to make it through the next day, week or month, but there has never been a better time to prepare the company for what comes next and what will sustain it for the future. 

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Contract Provisions That Help Manage Risk on Long-Term Projects →

Few things can dampen the thrill and promise of a newly closed construction deal than the realization that it could quickly become a losing proposition for the contractor depending on economic and other conditions. In an era of instant information, constantly adjusting markets and political extremes, projects that start under one set of assumptions or conditions can occur or conclude under much different ones. While no one has a crystal ball, there are contractual provisions that can provide clear guidance in the face of many “what ifs” that can arise in construction. 

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Construction Lien Waiver Provisions Contractors Should Be Using

It is common in construction for a subcontractor or material supplier of any tier to be required to provide a lien waiver when receiving payment. But not all lien waivers are created equal. While at a minimum, a lien waiver, by definition, needs to include a release of liens, it can also include many other terms that can tie up loose ends or resolve potential problems before they begin

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Techniques For Resolving Construction Disputes

With most construction projects involving dozens, if not hundreds, of companies and individuals, it is no surprise that conflicts arise that are not always able to be resolved on the jobsite. But these conflicts need not always reach the court room or cost thousands (or much more) to resolve. With some planning, contractors can build faster and less expensive dispute resolution options into their project so they can spend more time keeping the project moving and less time arguing over who is right. 

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