TY - GEN
T1 - Price Escalation in Design–Bid–Build Construction Projects
T2 - Canadian Society of Civil Engineering Annual Conference, CSCE 2023
AU - Chammout, Bahaa
AU - Nabi, Mohammad Abdul
AU - El-adaway, Islam
AU - Assaad, Rayan H.
AU - Jezzini, Yasser
N1 - Publisher Copyright:
© Canadian Society for Civil Engineering 2024.
PY - 2024
Y1 - 2024
N2 - The construction industry has witnessed unprecedented disruptions in the supply chain (SC) for the past two years due to the impact of the coronavirus (COVID-19) pandemic followed by the conflict between Russia and Ukraine. Such SC disruptions have been associated with prolonged lead times, increased costs, as well as tight labor markets. Generally, construction contracts differ in how they manage the contractual consequences and remedies in relation to various project aspects including price escalation. To this end, there is a dire need for understanding the risk allocation and contractual implications of price escalation on project stakeholders. The goal of this paper is to fill this knowledge gap by offering a better understanding of price escalation provisions under the most commonly used design–bid–build (DBB) standard forms of construction contracts. To achieve this goal, the authors followed a multistep research methodology. First, price escalation provisions were analyzed and compared under various DBB standard forms of contract including the: (1) American Institute of Architects (AIA), (2) ConsensusDocs, and (3) Engineers Joint Contract Documents Committee (EJCDC). Second, the contract provisions in the United States were compared to those in international and UK-based standard contract forms including the (1) FIDIC Red Book 2017, (2) New Engineering Contract (NEC), and (3) Joint Contracts Tribunal (JCT). Third, legal cases of actual disputes arising from price escalations in the SC were examined. Fourth, based on the contractual and legal analysis, guidelines and recommendations were developed in order to be utilized by the contracting parties in planning, handling, and mitigating the contractual implications of price escalation-related issues. Ultimately, the results of this research shall promote more balanced contractual practices regarding price escalations in construction projects, particularly in light of the current market disruptions.
AB - The construction industry has witnessed unprecedented disruptions in the supply chain (SC) for the past two years due to the impact of the coronavirus (COVID-19) pandemic followed by the conflict between Russia and Ukraine. Such SC disruptions have been associated with prolonged lead times, increased costs, as well as tight labor markets. Generally, construction contracts differ in how they manage the contractual consequences and remedies in relation to various project aspects including price escalation. To this end, there is a dire need for understanding the risk allocation and contractual implications of price escalation on project stakeholders. The goal of this paper is to fill this knowledge gap by offering a better understanding of price escalation provisions under the most commonly used design–bid–build (DBB) standard forms of construction contracts. To achieve this goal, the authors followed a multistep research methodology. First, price escalation provisions were analyzed and compared under various DBB standard forms of contract including the: (1) American Institute of Architects (AIA), (2) ConsensusDocs, and (3) Engineers Joint Contract Documents Committee (EJCDC). Second, the contract provisions in the United States were compared to those in international and UK-based standard contract forms including the (1) FIDIC Red Book 2017, (2) New Engineering Contract (NEC), and (3) Joint Contracts Tribunal (JCT). Third, legal cases of actual disputes arising from price escalations in the SC were examined. Fourth, based on the contractual and legal analysis, guidelines and recommendations were developed in order to be utilized by the contracting parties in planning, handling, and mitigating the contractual implications of price escalation-related issues. Ultimately, the results of this research shall promote more balanced contractual practices regarding price escalations in construction projects, particularly in light of the current market disruptions.
KW - Contracting
KW - Legal affairs
KW - Price escalation
UR - https://www.scopus.com/pages/publications/85207556675
UR - https://www.scopus.com/pages/publications/85207556675#tab=citedBy
U2 - 10.1007/978-3-031-62170-3_10
DO - 10.1007/978-3-031-62170-3_10
M3 - Conference contribution
AN - SCOPUS:85207556675
SN - 9783031621697
T3 - Lecture Notes in Civil Engineering
SP - 133
EP - 148
BT - Proceedings of the Canadian Society for Civil Engineering Annual Conference 2023 - Construction Track
A2 - Desjardins, Serge
A2 - Poitras, Gérard J.
A2 - Nik-Bakht, Mazdak
PB - Springer Science and Business Media Deutschland GmbH
Y2 - 24 May 2023 through 27 May 2023
ER -