The cause of material shortages goes beyond increased demand


In recent weeks material shortages and increased costs due to increased demand have been reported. See my colleague Laura's post: Construction materials shortages - Key contractual considerations.

However, it is not just the cost of materials that need to be factored into projects but also the ability to get those materials delivered in the volume required at the time required. With Brexit and Covid-19 both impacting the availability of hauliers, it is now increasingly important to plan projects carefully and allow sufficient programme duration to account for risks of delays in deliveries. It can be tempting to quote a competitive programme but be wary of the risk that may result if there was an impact to material deliveries. It is unlikely many contracts already entered into will account for delayed deliveries in the grounds for an extension of time, placing the risk of delays on the contractor. When planning future contracts, allow adequate float in the programme, confirm material and supply contracts as early as possible once the main contract is executed and book in the availability. The more advance planning undertaken the easier it will be to manage the risks posed. 

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