We have become used to all sorts of problems being blamed on Covid, even if sometimes the causal connection is tenuous. Similarly, the materials shortage now facing the industry - due to a number of interrelated issues including Covid - seems to be given as a general reason for increased tender costs and programmes. This is despite shortages and delivery times not being universally affected. As Simon Rawlinson points out in his recent article in Building https://www.building.co.uk/market-data/procurement-in-an-inflationary-market/ whether there is an effect depends on many factors: the nature of the project; the industry sector; the type of material and whether imported or sourced domestically; a contractor's supply chain; and more generally the steps taken in advance to mitigate the cost increases and procurement delays. When planning a new project, an Employer's professionals should interrogate more fully than has perhaps been necessary in the past, what materials are affected and why. Consideration can then be given to how genuine effects may be mitigated or taken into account, including how risk should be allocated. In other words it should no longer be a case of just saying that it is the contractor's job to organise the works and supplies to complete on time and on budget. An early collaborative approach and transparent dialogue is needed by all parties at tender, to agree how best to address the cost and time risks that arise and always in the context of the particular project.
Procurement in an inflationary market By Simon Rawlinson13 September 2021 No comments Save article With some materials prices going through the roof, inflation has become the hot topic for 2021. Simon Rawlinson of Arcadis examines what is causing the problem, why some categories are more affected, and what options clients have to mitigate inflation, including timing and risk transfer