Managing the Impacts of Material Price Fluctuations on Construction Projects
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Managing the Impacts of Material Price Fluctuations on Construction Projects

Co-author, Colorado Lawyer, Construction Law, March 2022

This article discusses how to manage material price fluctuations that affect construction projects.

Recent fluctuations in the prices of construction materials have threatened to wreak havoc on otherwise well-planned and well-managed construction projects. Economists and industry professionals have identified numerous factors causing or contributing to these fluctuations, including COVID-19-related shutdowns and restrictions, lingering tariffs and quotas, increased construction activity among single-family homeowners, and even instances of hoarding and profiteering. Whatever the underlying cause, material price fluctuations represent a profound and lasting risk to construction projects by causing unanticipated spikes in construction costs and threatening to delay project completion dates due to material rationing or unavailability. This article explores how to manage the impacts of material price fluctuations by (1) allocating the risk and responsibility through contractual provisions, and (2) taking proactive measures to avoid or mitigate impacts on the project.

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