- 1). Go back and reread the agreement documents. This is the way to get a handle on the whys and hows of an escalator clause or other change in a project.
- 2). Identify the specific materials or aspects of the job that are causing the escalator clause to kick in. Many times these days, contractors are turning to escalator clauses due to spikes in oil prices, but it's always necessary to confirm what the cause is and whether there is more than one issue with materials that is driving cost.
- 3). Do timelines to figure out the rate and projected future of materials fluctuations. A timeline will help you put an escalator clause in context. Figuring out how long you have to implement a project at the original cost can empower you to make critical decisions.
- 4). Talk to contractor reps about how they see the situation. See how much time you can buy to get the project done without a big raise in cost. Troubleshoot with solutions like forward materials purchases.
- 5). Evaluate long-term gains and losses. Find out if there is a way to postpone the project through a provision in the agreement or cut the project down. These questions are crucial to figuring out how to address a rise in price that occurs when a contractor invokes an escalator clause.
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