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07/22/2024 12:31 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20230&cosponId=41089
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted: June 23, 2023 10:21 AM
From: Representative Nick Pisciottano
To: All House members
Subject: Construction Material Price Escalation
 
Recently we have seen a dramatic rise in material costs due to inflation and global supply chain disruptions, which has overwhelmingly affected the construction industry. In fact, the price of building materials rose 33 percent between March 2020 and March 2022. This price escalation has particularly hurt contractors who were awarded construction contracts based on bids submitted prior to the rising costs of materials required for the project. Contractors currently in this scenario are forced to carry the full burden of these price escalations, potentially leading to financial harm while they are completing public projects.
 
I will be introducing legislation to address these extraordinary construction material price increases. Specifically, my legislation will authorize Commonwealth agencies to adjust previously awarded contracts with public works contractors whose bids did not account for unforeseen price increases for construction materials.
 
The legislation would allow contractors to apply to the Department of General Services (DGS) for material adjustments – but not labor costs, profit, or overhead. Specifically, the bill would authorize the Secretary of the Department to adjust the prices of construction material line items in public contracts. A contractor would be eligible 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. Any adjustments will be made public on the DGS website.
 
We need to do more to combat the inflating price of construction materials and ensure contractors are fairly compensated for the public projects they constructed during the pandemic. I hope you will consider joining me as a co-sponsor of this legislation.



Introduced as HB1514