b'FEATURESUPPLY CHAIN CHALLENGES REQUIRE A COLLECTIVE APPROACH FROM ALL STAKEHOLDERS THE ISSUES OF SHORTAGES AND PRICE VOLATILITY AFFECT ALL PARTIES TO A CONTRACT, AND MUST BE ADDRESSED COLLABORATIVELYB eyond the immediate challenges brought on by the global COVID-19 pandemic, the issue of supply chain challenges and price volatility has hit the construction industry particularly hard. Regardless of the explanations behind these challenges, whether it be pent-up demand for material, increased infrastructure invest-ment to support the economy, disruption to supply routes and the global supply chain, or a myriad of other reasons, the issue has plagued the industry across Canada and around the world. While price fluctuations and material delays are not challenges unique to the mechanical contracting sector, nor entirely unexpected, the current challenge of supply seems muchSome of the steps to be considered include: can provide more price certainty for broader and more consequential. The situa- Look at Early Involvement of Keythe project. tion is exacerbated by backlogs occurring inStakeholders to Ensure ProjectWork with Contractors to Ensure the present, stressing a supply chain not justBudgets Reflect Pricing andTimelines and Schedules Are now, but into the future as well.SupplyTrends RealisticNeedless to say, the issue has reverberatedEarly consultation and involvement ofWith the pressures of supply, the avail-through the entire construction projectcontractors can assist owners and consultantsability of skilled labour, and residual ef-supply chain. Consultants are spendingin understanding current market realities.fects from the COVID-19 pandemic, early greater time value engineering, owners areSome materials have seen price increasesdiscussions with contractors can ensure considering the impact of increased costsof 35 per cent in weeks with no indicationexpectations from all parties on a project to their capital budget, and contractorsof staying stable anytime soon, while otherare communicated and understood.are working to mitigate the risk of pricematerials may not even be available. Involv-fluctuation while remaining productive anding subcontractors and suppliers early canMaintain Regular and competitive. For those projects already ten- ensure products are ordered and available forConsistent Communicationdered, contractors are dedicating significantthe project. Regular communication between all resources and time ensuring they can meetAllow for Material Price Changestakeholders can make parties aware of project deadlines with respect to supply andClauses in Bids any potential or unforeseen challenges price. For anticipated projects and thoseGiven the worldwide uncertainty on supplythat may arise.being tendered, greater risk and uncertaintyand pricing, the inclusion of price escala- Also important is the role suppliers can is being downloaded to the contractor.tion and/or reduction clauses can provideplay in assisting contractors, particularly Further, and perhaps most unfortunately,confidence for bidders and buyers that pricewith respect to material selection and no silver bullet exists when it comes to ad- increases/decreases can be managed in a fairsupply chain intelligence. dressing the issue. This is why it is critical allmanner for all.project and industry stakeholders considerConsider Reducing Award PeriodWhat is consistent in each of these steps a more collaborative approach to lessen theon Projects is the active involvement of multiple negative impact of supply chain issues andIn many cases, suppliers and mechanicalstakeholders and parties to a contract. price fluctuation. If the issue is broadly dealtcontractors are only being provided sevenSince this issue impacts all aspects of the with, and not left solely in the hands of theto 14-day terms on their pricing, others justindustry, now is the time for stakeholders contractor, there is a greater likelihood thetwo days, and in some cases they are onlyto collaborate and work together to less-impact can be mitigated and lessened forgiven until the material arrives. Shorteningen negative impacts of supply shortages all involved.the bid approval timeline to reflect this realityand price fluctuation. 16 MCASwww.mca-sask.com'