The Government of Northern Ireland has made plans to help entrepreneurs deal with severe delays and inflation.
The Northern Ireland executive advised government departments to cooperate “in a spirit of mutual trust” when dealing with delays caused by the shortage of building materials. They said if the contractor has provided evidence of an open book material shortage, the department should work with them to find replacement materials or a revised completion date. Likewise, they said that apart from a price adjustment clause, an open book approach should be taken and evidence of a potential net price adjustment should be examined.
For future contracts, they said the risks of delay should be considered in advance and budgets should be set, keeping inflated prices in mind.
Farrans, a building and civil engineering company based in Northern Ireland, said the advisory note had helped recognize the problems facing the industry.
Farrans Managing Director Dominic Lavery said: “While more details will be released on the practical application in due course, this recognizes that contractors could not have predicted or planned for the price fluctuations and shortages that will occur. are currently affecting the global market due to COVID. and the high demand that follows. We hope that other parts of the UK and Ireland will put in place similar mechanisms to support the industry.
Ministries were also urged to speed up the assessment and contract award phase. “It will be difficult for contractors to keep bid prices open for acceptance for long periods after the bid submission date,” the ministry said.
Construction Employers Federation chief executive Mark Spence said that with public sector work worth £ 1bn in a £ 2.5bn market in Northern Ireland, the support was essential. “We welcome this vital lifeline for local contractors who for many months have borne the growing burden of unforeseen global price increases and material shortages while ensuring that public works continue to be delivered. “, did he declare.
While contracts in Britain included limited provisions for fluctuating clauses, the same had not been true for Northern Ireland. Spence said the advisory note would help level things off. “This document helps agree increases on existing contracts and recommends the inclusion of fluctuation clauses in future contracts, bringing NI back into line with the rest of the UK,” he said.
Separately, the Department for Business, Energy and Industrial Strategy today released its latest materials price index for the UK, which showed prices rose 14.7% in June 2020. compared to the same period last year. Imported plywood and manufactured steel experienced the highest levels of inflation.