With the rising costs in materials, does anyone have any good strategies for managing risk related to it? We’ve had a few products like steel and plywood (everyone’s favourite) increase substantially in the last six months and are struggling to make up the costs.
We just went through a tender phase on my project where costs came in 30% higher than previous budgets. We expected a bit but not that much.
For us – Guillan nailed it, honesty was the best approach. But I’d also suggest adding contingencies to earlier budget – carrying it as a line item. Let the owner decide if they want to carry the contingency or not that way, if the escalation does hit and the contingency wasn’t carried you can’t be blamed.