Time and Price Impacted Materials - 200.1

Combat Price Escalation and Supply Chain Disruption Risk with a Best Practice Price Escalation Clause

Tariffs jeopardize your bottom line because construction materials prices are rising and disrupting your supply chain availability. This uncertainty threatens the construction industry, which possesses notoriously razor-thin profit margins. The financial viability of your company, as well as your suppliers and specialty contractors, is a risk. But you can be proactive in minimizing this risk with better contract language that is both fair to you, the owner, and your company.

ConsensusDocs is the only publisher of a standard material price escalation clause: the ConsensusDocs 200.1 Material Price Escalation Amendment. This material price escalation clause lists the specific materials affected in a particular project and adjusts the contract price based upon a certain metric, usually an agreed-upon objective market index.

What are the benefits of a Material Price Escalation Amendment?

The Material Price Escalation Amendment provides superior risk management strategy and protects owners, suppliers, trade contractors, and general contractors equitably and effectively. Want to keep your company’s financial status healthy, even in the midst of a volatile market? Include the Material Price Escalation Amendment in your next construction contract.

The Material Price Escalation Amendment can be amended to a ConsensusDocs prime construction contract to help the Owner and the Constructor (builder, general contractor, design-builder, or construction manager) negotiate equitable price adjustments for essential materials in a construction project experiencing – or expected to – experience significant, industry-wide cost fluctuation.

When material prices skyrocket or shipping disruptions delay project deadlines, the Material Price Escalation Amendment provides a fair allocation of risk. Additionally, the clause can act as a de-escalation clause if the price goes down, saving the owner money.

The Material Price Escalation Amendment also includes the following mitigation strategies:

• limiting amount of time a bid can be relied upon
• breaking projects into phases
• providing allowances or alternates for materials
• early procurement and storage of materials
• prefabrication
• increasing contingency amounts

The Material Price Escalation Amendment may also be considered when tariffs increase or their enforceability is removed.

Bottom line: in a rapidly changing and increasingly uncertain market, the only sure-fire way to protect against price escalation is by including a material price escalation amendment in every construction contract.

Let ConsensusDocs help protect your next project from material price escalation. See sample and purchase options below.