HOW AN ESCALATION CLAUSE CAN PROTEcT LBEs
Construction projects can be impacted by fluctuating materials costs , labor shortages , or other unforeseen conditions that can increase the overall cost of the project . The escalation clause safeguards contractors by allowing them to adjust the contract price to account for these cost increases .
Economic conditions can also affect the cost of construction materials and labor . The escalation clause can shield contractors by allowing them to adjust the contract price based on changes in market conditions .
Inflation can decrease the value of money over time , and an escalation clause can protect contractors by allowing them to modify the contract price to account for inflation .
Suppliers or subcontractors may also increase their prices unexpectedly . An escalation clause can defend contractors by allowing them to pass these price increases on to the client .
If you need help reviewing your City or County of San Francisco-awarded contract terms , contact the Contractor Development Program – we ’ re always happy to assist !
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