b'PRESIDENTS MESSAGEdate. The alternative is a simple and reliable commodity index. Asphalt prices, for example, tend to move in sync with oil prices so theoretically, OPEC prices could be used as a baseline for compensation adjustments at the time material is ordered. Another among many variables is who initiates the change, and since owners are the potential beneficiaries of the price adjustment, the initiation rights are reciprocal. Some owners will want a price cap, which I strongly recommend against although I can see a termination for convenience clause on smaller projects with a high vulnerability to one or two specific material price spikes.THE GOOD NEWS FOR OWNERS PROCURING PROJECTS NOW IN THE WAKE OF THE PANDEMIC IS THAT WHAT GOES UP, PARTICULARLY WHEN IT GOES UP AS ABRUPTLY AS CONSTRUCTION MATERIAL PRICES, INEVITABLY COMES DOWNHopefully, termination for convenience clauses will be uncommon. Expect, however, that the rules of engagement will necessitate better communication to ensure buyers ofAward winning company delivering Aw winning companompanyy deliv delivering ering Awarard d winning cconstruction keep their options open. Supply chain shortagesextraordinary services and products and/or lengthy delivery constraints might sometimes trumpe xtraor dinary servic services and pres and products oducts extr aordinaryprice volatility and incent an owner to consider alternativefor every project, every time.fforor e evveryery pr project, eoject, evveryery time. time.products/materials or domestic options when foreign suppliers cant meet project requirements. Similarly, an owner might opt for early purchasing of products and/or materials when higher prices seem inevitable. In that event, insist on a mechanism for early payment even when it is the contractor and not the owner storing the material. Owners will need to work this out with their project lenderssince there hasnt technically been an improvement to the property and contractors will need to comply with protection mechanisms provided they are fair and reasonable and by extension compensable.This is a lot to digest, I know. That said, I believe de-escalatingAn extensive portfolio of complexAnn e exxtteennssivivee p poorrttffooliloio o off c coommpplelexxthe risk of price escalation is a necessary evil. To date, theseAclauses are relatively unfamiliar, so templates are few and farstructural steel design. Bridges, Institutional, sttrruuccttuurraall s stteeeel ld deessiiggnn. .B Brrididggeess, ,I Innssttitituuttioionnaal,l , sbetween. TCAs Industry Practices Committee and its counterpartCommercial, Industrial, WE DO IT ALLCat the Canadian Construction Association are researchingCoommmmeerrcciiaal,l ,I Inndduussttrriaial,l ,W WEE D DOO I ITT A ALLLLguidelines but amassing a useful database will take time. EarlyCHECK US OUT!adopters like ACQ in Quebec and the ConsensusDocs PriceC CHHEECCKKUUSSOOUUTT!!Escalation Resource Centre in Arlington, Virginia have started the process but much needs to be done. As always, we need allbensonsteel.comthe help we can get so please share. bbeennssoonnsstteeeellccoommINNOVATIONI NNNOOVVAATTIIOONNINJohn Mollenhauer TCA President & CEOBUILDERSDIGEST Quarter 2 20227'