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House Co-Sponsorship Memoranda
House of Representatives
Session of 2021 - 2022
Regular Session
MEMORANDUM
| Posted: | August 29, 2022 09:36 AM |
|---|---|
| From: | Representative Timothy J. O'Neal |
| To: | All House members |
| Subject: | Emergency Construction Material Price Escalation Relief |
| In the very near future, I will be introducing legislation to address extraordinary price increases borne by the construction industry for building materials. Material cost increases resulting from global supply chain disruptions and inflation have profoundly affected the construction industry. Contractors currently face unanticipated cost escalation, sometimes of more than 300%, on the price of construction materials. This has especially hurt contractors who were awarded construction contracts based on bids submitted prior to severe price escalation of materials required for the project. Public works contractors facing this scenario are currently obligated to carry the full burden of these price escalations, potentially leading to financial harm while they are completing public projects. Specifically, this legislation would authorize Commonwealth agencies to adjust previously awarded contracts with public works contractors whose bids did not account for the unforeseeable escalation of material prices resulting from global supply chain disruptions and inflation. The Secretary of General Services would be authorized to adjust the prices of construction material line items in public contracts if the project’s bids were submitted between March 15, 2020 and the effective date of the legislation, and if the cost of material acquisition by the contractor, subcontractor, or supplier has increased by 5% or more since the time of the bid. Contractors would request contract adjustment by submitting an application to the Secretary of General Services with evidence establishing a 5%+ increase in material prices. Determination to adjust the contract would be based on available evidence I respectfully ask for your consideration to join me as a cosponsor of this timely legislation. |
Introduced as HB2901