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Recently, I reviewed some Exclusions and Qualifications from a GMP proposal for a large ED expansion project. One of the clarifications was as follows:<o:p></o:p>
"Should there be a significant price increase to any specified building material(s) through no fault of the Contractor during the performance of the Work, the Contractor shall, before making any additional purchases of specified material(s), promptly provide written notice to the Owner stating the increased cost, the building material(s) in question, and the source of supply, supported by invoices or bills of sale. The Owner, upon receipt of notice of a significant price increase, shall provide notice to the Contractor within twenty-four (24) hours of an authorization to proceed with the purchase of the specified building material(s) along with a corresponding increase to the Contract Sum, or of Owner's intent to terminate the contract for its convenience."<o:p></o:p>
In our review comments to the Owner, I stated the following:<o:p></o:p>
"Item #4 addresses significant price increases. This is listed as a viable cost against contingency in section 126.96.36.199 of the A133-2009 agreement. One caution is that Section 3 states that once the Construction Contingency is exhausted, all costs and expenses listed in section 1 that would have otherwise qualified for use against Contingency shall be borne by the Construction Manager at no additional cost to the Owner."<o:p></o:p>
To which, the Contractor responded:<o:p></o:p>
"#4. Our clarification is meant to draw attention to the clear Force Majeure material escalations and limited availability associated with current market conditions."<o:p></o:p>
As the AIA Standard Form A201 General Conditions for the Contract for Construction do not contain a force majeure clause, we would have to look to section 8.3 of the A201 for guidance. However, this section would only permit the Contract to be modified for a non-compensable time extension associated with the "event". What about the rise in the cost of the materials? In a GMP, is the CM not responsible for providing a 100% complete and functional building for a set cost?<o:p></o:p>
While I'm not advocating mixing and matching organizations, ConsensusDocs has produced a materials inflation exhibit would provide another (contractor's) view of what an exhibit might look like.