{"id":898851,"date":"2021-06-16T12:05:29","date_gmt":"2021-06-16T18:05:29","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898851"},"modified":"2021-06-16T12:05:32","modified_gmt":"2021-06-16T18:05:32","slug":"material-escalation-provision","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/material-escalation-provision\/","title":{"rendered":"How are you Dealing with Material Delays \/ Supply Chain Impacts?"},"content":{"rendered":"\n<p>David Adelstein | <a href=\"https:\/\/www.floridaconstructionlegalupdates.com\/how-are-you-dealing-with-material-delays-supply-chain-impacts\/\" target=\"_blank\" rel=\"noreferrer noopener\">Florida Construction Legal Updates<\/a><\/p>\n\n\n\n<p>In a prior article I discussed a\u00a0<a href=\"https:\/\/www.floridaconstructionlegalupdates.com\/material-prices-climb-are-you-considering-a-material-escalation-provision\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">material escalation provision<\/a>\u00a0in your\u00a0<strong><a href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-material-price-risk\/\">construction contract<\/a><\/strong>\u00a0to account for the volatility of the material price market.\u00a0 While including such a provision may not have been much of a forethought before, it is now!<\/p>\n\n\n\n<p><strong>What about concerns with the actual supply chain that impacts the availability of and the lead time of materials? &nbsp;How are you addressing&nbsp;this concern in your construction contract?<\/strong><\/p>\n\n\n\n<p>The pandemic has raised awareness to this issue as certain material availability has been impacted by the pandemic.&nbsp; As a result, parties in construction have tried to forecast those materials where delivery issues may occur including those materials with longer than expected lead times.&nbsp; But equally important is how this issue is being addressed in your construction contract including how you want to negotiate this risk in future construction contracts.<\/p>\n\n\n\n<p>Start with the\u00a0<strong><u>force majeure provision<\/u><\/strong>.\u00a0 Does this\u00a0force majeure\u00a0provision address supply chain impacts?\u00a0 It may touch upon it but you may want more clarification dealing with delivery delays that impact a project\u2019s schedule and identifying that this includes a supply chain impact attributable to a specific occurrence, such as the pandemic.\u00a0 Generally touching upon an issue is not the same as specifically addressing an issue for practical purposes to avoid any dispute down the road.<\/p>\n\n\n\n<p>One way is to include or address certain supply chain impacts caused by the COVID-19 pandemic, any future pandemic, and other potential factors based on the current economic climate.&nbsp; If one thing COVID-19 taught us is that we need to fully address the risk of pandemics moving forward, both from a time standpoint and a cost standpoint.&nbsp; Another thing COVID-19 taught is to precisely word force majeure and other provisions so that parties are on the same page when it comes to a foreseeable risk.<\/p>\n\n\n\n<p>The provision can be broad enough to include any supply chain impacts caused by the pandemic and any future pandemic and\/or can include specificity based on certain materials that are known as of the date of the contract that have anticipated supply chain concerns and long lead times.&nbsp; While a contractor does its best to account for materials with long lead times, there are factors that can come into play associated with when that material is procured including the construction documents, the approval of shop drawings, deposits for fabricated items, transportation including where the material is being shipped from, and storage and staging issues.&nbsp; In other words, there are factors that can lead to delays in deliveries that simply occur regardless of the planning.<\/p>\n\n\n\n<p>When preparing and negotiating your construction contract, consider the issues associated with material escalation and supply chain impacts.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates In a prior article I discussed a\u00a0material escalation provision\u00a0in your\u00a0construction contract\u00a0to account for the volatility of the material price market.\u00a0 While including such a provision may not have been much of a forethought before, it is now! What about concerns with the actual supply chain that impacts the&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/material-escalation-provision\/\">Continue reading <span class=\"screen-reader-text\">How are you Dealing with Material Delays \/ Supply Chain Impacts?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,10320,224,11490],"class_list":["post-898851","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-building-materials","tag-construction-contract","tag-material-escalation-provision","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How are you Dealing with Material Delays \/ Supply Chain Impacts? 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