The COVID pandemic not only created supply chain issues but also highlighted the continuing widening gap in skilled labor – both in construction and other skilled trades. 

Managing Construction Cost Escalations and Supply Delays: How to Protect Yourself

Before the COVID pandemic, cost escalations and supply delays during construction were expected but manageable. During a typical construction project, an owner or general contractor would encounter a price escalation about once a quarter. But the pandemic brought on many unexpected problems (like the toilet paper shortage).

A contract between the owner and the general contractor is the backbone of a construction project. Without a contract, the general contractor has no direction, and the owner has no protection. So it’s important to have a good, solid contract – and that’s where AIA construction contracts play a role. Let’s look at what AIA construction contracts are and why you should use one.

In a construction contract, the pricing structure forms the basis for all transactions that occur during construction. Two common pricing structures are guaranteed maximum price (GMP) and lump sum.