Cost Escalation Analysis

Over the course of long-term projects, inflation of material prices often results in disputes between owners and contractors. Material and labor escalation clauses can be used as contractual tools to account for pricing adjustments due to changes in the cost of materials, while forensic material escalation analysis can be performed to retroactively quantify material cost adjustments in a manner equitable to owners and contractors.

Combine Services to Stay in the Know

Through the use of various pricing indexes and historical data, Spire Consulting Group can construct historical pricing profiles for construction materials. Our material escalation analysis is often a helpful tool in conjunction with the following services:

• Contract administration
• Construction cost estimating
• Mediation and arbitration support
• Litigation support

A Valuable Tool for Your Projects

Construction material escalation analysis is an objective tool for dispute avoidance and claims mitigation if used proactively and is an objective tool for dispute resolution if used forensically. It can also be combined with revised cost forecasting for an ongoing project to avoid further disputes.

Whether you are a contractor or subcontractor trying to prove material escalation or an owner attempting to defend against over-inflation of material costs, Spire’s consultants are equipped to provide material escalation analysis to supplement your efforts.

The Importance of Following Price Escalation in Construction

Jumping prices for materials put your team in an odd position. It’s best to stay in the loop with cost escalation so that you can tackle projects accordingly with fewer surprises later.

Often, contractors and subcontractors agree to a job long before materials are actually purchased. It’s important to communicate with your clients when you’re developing job estimates. Using projections for material costs helps you remain transparent with stakeholders, which makes them aware of potential price increases you could see by the time you’re ready to build or the job is done.

How We Help You During a Cost Escalation Analysis

Spire Consulting Group helps you see the full picture with construction escalation. Whether you’re getting ready to take on a large-scale project or complete work for a repeat client, Spire allows you to put your best foot forward from the start date through completion:

• Review contract terms: Identifying gray areas in a construction contract saves you from discrepancies.
• See where you can save: We can help you determine if changing your supplier or buying construction materials in bulk is proactive for combating price escalation.
• Collect concrete data: Know when you’re getting a good deal on materials by looking at accurate price projections before you settle on a supplier for what you need.
• Recognize common escalation causes: Spire has a grasp on what makes material prices change. Your team can purchase materials and supplies knowing whether prices are currently on the rise.
• Dodge accounting mistakes: See common areas where decision-makers misstep when purchasing construction materials. We note when it’s logical to purchase in bulk or as needed.
• Factor in storage considerations: Some jobs call for you to buy construction materials in large quantities. Although you might save initially, it’s important to know if you can afford long-term storage, too.
• Analyze scheduling: A construction project’s timeline will influence the right time to purchase materials. You can potentially save money by expediting or pushing back the deadline based on trends.

Contact Spire for Cost Escalation Analysis Assistance

Material escalation analysis can play a pivotal role in the drafting of contract documents as well as forensically in the expert reports and witness testimony provided for litigation support. With Spire, you can stay up to date with cost escalation trends to plan for building in diverse industries. It’s our goal to solve and simplify complex problems to help you build new structures with peace of mind. Get the individualized attention you deserve to respond to changing material costs year-round.

For assistance with a construction cost escalation analysis on a new contract or an ongoing project, call our team or click here.