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RCCU1 Holds Groundbreaking for New Early Learning Pre-K Center

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Richland County Community Unit #1 recently held a groundbreaking ceremony on August 30, 2022, for the new construction of its Early Learning Pre-K Center. Construction Manager Poettker Construction and designer BLDD Architects will build a new 16,400 square feet early learning facility to create more space for the district’s Pre-Kindergarteners and consolidate the elementary school and the Early Learning Center into one campus.

Richland County Elementary School opened in January of 2000 with the merger of three elementary schools in the district. Since then, multiple elementary school reorganization efforts have taken place, from closing an aging elementary school to adding one through the annexation of the West Richland School District into the county-wide district. Additionally, Richland County has seen growth in its Pre-K Programs over the past few years.

“The result of all of these factors is a very crowded elementary school. Through the construction of an early learning center, we solve the problem of a very cramped school and provide a dedicated facility to our preschool and birth to three programs,” said Chris Simpson, Superintendent of RCCU1. “We are confident in Poettker Construction and BLDD Architects’ ability to provide us with a modern early learning center that will meet the needs of our youngest learners and their families.”

The new Pre-K facility will include seven preschool classrooms, play areas, and an indoor multi-purpose area.

“Recently, Poettker Construction successfully completed a high school renovation and addition for Richland County Community Unit #1,” said Jon Carroll, Executive Vice President and Chief Operations Officer at Poettker Construction Company. “We are excited to continue our partnership and deliver a greatly enhanced Early Learning Center to the community.”

Richland County Community Unit #1 hosted a groundbreaking ceremony at the site of the new Early Learning Center located at 1001 N Holly Rd Olney, IL 62450. The new build is expected to be completed for the 2023-2024 school year.

Established in 1980, Poettker Construction is an award-winning family-owned business specializing in construction management, design/build, general contracting and self-perform services with an emphasis to exceed the client’s expectations. Poettker Construction provides safe, quality, sustainable, and technology solutions to clients in the Education, Distribution, Government, Healthcare, Hospitality, Municipal, Recreation, Retail, and Utility industries. The company prides itself on building long-lasting relationships with their clients, business partners and the communities in which they work. For more information, visit www.poettkerconstruction.com.

Internal Fraud in Construction

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Submitted by Schmersahl Treloar & Co

Internal fraud drains more than $4.7 trillion annually from global businesses, according to an estimate by the Association of Certified Fraud Examiners (ACFE).

The median loss from internal fraud at companies in the construction industry is $203,000, according to ACFE’s latest Report to the Nations. Construction experiences the fourth largest median losses of any industry (the median loss for all businesses is $117,000).

Although companies can experience pilferage from customers, vendors and other sources, employees account for the highest losses, when taking into account offenses such as fraudulent insurance claims, unauthorized time off and theft of proprietary information. Crimes can be as simple as stealing company supplies or as complex as sophisticated financial statement fraud.

More specifically, fraud by managers and key executives generates the highest dollar losses because these employees are in a good position to falsify financial, credential, work-related or test-related documents for personal gain.

Construction companies are more susceptible to corrupt business practices than other industries. This can include bribery and state capture.

What can your company do to prevent theft?

The ACFE Report found these measures are effective:

• Improve internal controls. For example, do not allow the same employee to keep books, collect funds, write checks and reconcile bank accounts. Arrange for monthly bank statements to be delivered unopened to the company owner, who should review them for unusual transactions, such as declining deposits and checks to unfamiliar parties.

• Conduct background checks on new employees.

• Arrange for fraud audits by the company’s outside accountants or an internal audit department. CPAs can conduct regular independent internal control studies of cash accounts, bank statements and other items to detect criminal activity. Surprise audits are an effective, yet underutilized, tool in the fight against fraud.

• Be willing to prosecute perpetrators. Some organizations that were victimized by fraud didn’t report the cases to law enforcement because: they were afraid of bad publicity; reached a private settlement; wanted closure; or considered internal punishment sufficient.

• Provide ethics training for employees. Educate staff members about the possible sources of fraud and consequences, such as the loss of jobs, raises and profits.

• Institute anonymous fraud reporting mechanisms, such as hotlines. Fraud is commonly discovered through tips from employees, vendors, customers or other sources. These people are frequently in a position to see violations of company policies or excessive personal spending by colleagues.

• Install workplace surveillance devices. For example, a video camera monitoring a loading dock where theft is suspected.

• Look for behavioral red flags including the perpetrator living beyond his or her means and having financial difficulties. They can also involve an unwillingness to share duties, a “wheeler-dealer” attitude, divorce or family issues, addiction problems, refusal to take vacations and an unusually close association with vendors or customers.

Important Considerations
• Globally, more than two-thirds of all frauds are committed by men. In the United States, men committed an estimated 73% of all frauds.
• Globally, the median loss was also higher when committed by men ($125,000) as compared with women ($100,000).
• Losses tend to rise as the perpetrators’ tenure with the organization increases.
• Small businesses are especially vulnerable because of a lack of basic internal control measures.
— Source: 2022 Report from the Assn. of Certified Fraud Examiners

Examine Workplace Environment
One important factor in whether or not employees steal is their attitudes. Employees who feel they are treated fairly by their company are less likely to commit fraud. Many offenses are committed by people who hold grudges and are looking for revenge.

Take a zero tolerance stand on fraud. With a few basic procedures in place, internal business theft can be significantly reduced — or even eliminated — so your construction business can flourish. Ask your accounting firm for more information.

Microchip Plant Construction Boosted by CHIPS and Science Act Funding

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

In August, the Biden administration signed into law the CHIPS and Science Act (H.R. 4346), which provides U.S. semiconductor manufacturers with $52.7 billion over the next five years to increase the production of microchips.

The funding, paired with local and state project-specific tax incentives, is spurring plant construction in Ohio and elsewhere.

The U.S., the country that created the semiconductor industry, currently ranks behind Taiwan in manufacturing volume. The aim of H.R. 4346 is to stem the two-year-plus chip shortage and buoy other related U.S. market sectors including construction.

Intel U.S. Government Relations Vice President Al Thomson says in January 2023 the global company will spend $20 billion on two chip fabrication plants – known as fabs – near Columbus, OH. The new “megafab” site could eventually house a total of eight Intel fabs in a collective construction effort totaling $100 billion. Intel is calling upon all commercial contractors statewide and beyond to build the 7,000-person workforce that will construct the plants, with the goal of opening them in 2025.

Congressional support for the CHIPS Act came in large part due to worries about the U.S. falling behind China in terms of technological leadership and strength, and from concern that without intervention, the U.S. tech industry’s manufacturing capacity would remain second to Taiwan’s.

The European Union’s Chips for Europe initiative, $17.1 billion strong in terms of new funding, echoes the thrust of the CHIPS Act.

Asian competitors are also planning an increase in the manufacturing of microchips. Taiwan Semiconductor Manufacturing Co. is estimated to be investing up to $44 billion in new chipmaking plants and equipment.

A leading driver of chip demand on all fronts was the COVID-19 pandemic, which spiked the demand for work-from-home technology including PCs, tablets and webcams. Chips serving as the brains for other work-life resources such as dishwashers, LED light fixtures and baby monitors added to demand intensity. Play at home devices such as game consoles also fueled increased chip demand since the pandemic began.

Crippling Texas freezes in February 2021 that knocked more than 70 power plants offline and cut power to a Samsung chip plant also magnified the shortage. COVID worker lockdowns worldwide fed into the lack of microchips being produced for the automotive industry and other market sectors.

The CHIPS and Science Act is spurring domestic construction. Indiana-based SkyWater Technology Inc. plans to invest $1.8 billion in a chip research and production facility in Indiana, in partnership with the state and Purdue University. Boise, Idaho-based Micron is planning to build a $40 billion memory chip manufacturing plant. And the partnership of Qualcomm and GlobalFoundries is expected to materialize in a $4.2 billion chip plant expansion in upstate New York.

“Federal investment will enable SkyWater to more quickly expand our efforts to address the need for strategic reshoring of semiconductor manufacturing,” said SkyWater CEO Thomas Sonderman.

S. M. Wilson & Co. Hires Twelve Project Team Members

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Clay Collard
Becky Geiger

S. M. Wilson & Co., a St. Louis-based construction manager and contracting firm, has added twelve new employees who will work in project delivery roles. These new team members will help deliver successful projects throughout the region for education, healthcare, warehouse and manufacturing, civic and retail clients.

Wendy Bruner
Wes Byrne
  • David Amador – Assistant Superintendent 
  • Wendy Bruner – Project Accountant
  • Wes Byrne – Project Manager
  • Clay Collard – Project Manager
  • Becky Geiger – Project Accountant
  • Brandon Groom – Assistant Project Manager
  • Caleb Horton – Project Engineer 
  • Greg Nanney – Project Superintendent
  • Elle Osterreicher – Project Assistant
  • Clayton Pezold – Project Engineer
  • Ryan Phipps – Project Superintendent
  • Chris Reid – Project Superintendent

ABOUT S. M. WILSON & CO.

S. M. Wilson is a full-service construction management, design/build and general contracting firm with headquarters in St. Louis and offices in Edwardsville, IL and Cape Girardeau, MO. Founded in 1921, S. M. Wilson is dedicated to going above and beyond expectations for their clients by putting people first. The 100% employee-owned company is one of the leading construction management firms in the Midwest. Areas of expertise include education, commercial, healthcare and industrial projects. For more information, visit www.smwilson.com.

IMPACT Strategies Adds Two New Office Staff Members

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IMPACT Strategies’ office staff has grown by two – the firm has added Tori DeClercq as Project Assistant and Gerica Stucker as Accounting Coordinator.

Tori DeClercq

Tori DeClercq holds a bachelor’s degree in agricultural science from Western Illinois University. In her new position as Project Assistant, Tori will be assisting project managers throughout all phases of construction on IMPACT’s projects across the region. She joined IMPACT Strategies in April after working for several years in the agricultural industry. DeClercq lives in Freeburg, IL with her husband and one-year-old daughter.

Gerica Stucker

Gerica Stucker brings more than seven years of administrative experience in the construction industry to her new role as Accounting Coordinator. A member of the IMPACT team since May, she holds an Associate of Science degree from Southeastern Illinois College. Stucker resides in Collinsville, IL.

Mark Hinrichs, President of IMPACT Strategies said, “We are very excited to have Tori and Gerica on board. Each brings a high level of expertise, attention to detail, and organizational skill and is a true asset to our team. We’re pleased to welcome them to the IMPACT Strategies family.”

IMPACT Strategies provides client-focused construction management, design/build, and general contracting services. The firm offers a full continuum of innovative design/build service capabilities including proven construction management processes and site development. IMPACT Strategies serves a regional and national client base in the Healthcare, Senior Living, Multifamily, Office, Retail, and Warehouse/Distribution markets from its offices in Missouri, Illinois, and Ohio.

IFMA St. Louis Honors Members, City Foundry STL at FM Day

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Members of the St. Louis Chapter of IFMA (International Facility Management Association) gathered to recognize two industry members and an outstanding commercial facility. Held on Wednesday, June 22, at Orlando Gardens in suburban St. Louis, the awards were presented during the chapter’s celebration of National FM Day. Started in 2008, FM Day underscores the value and contributions of facility managers in St. Louis and around the nation who ensure that commercial buildings provide a safe, healthy and productive environment.

Award recipients were:

Gary Wood, left, COO and Founder of Stryker Construction and IFMA St. Louis President Elect, presented the Distinguished Facility Manager of the Year award to Dustin Montgomery, Assistant Director – Construction Services, Saint Louis University.

Distinguished Facility Manager of the Year: Dustin Montgomery, Assistant Director – Construction Services, Saint Louis University

Montgomery’s career spans nearly two decades in facility management. He oversees the design and construction for new projects and renovations at the university. His projects include several key additions to Saint Louis University: Grand Halll, Spring Hall, New Jesuit Hall, Macelwane Hall, Interdisciplinary Science and Engineering Hall, Monsanto Hall and Koenig Plaza. He currently is overseeing the O’Laughlin Family Champions Center, which is expected to open in May 2023.

Gary Wood, left, COO and Founder of Stryker Construction and IFMA St. Louis President Elect, presented the Distinguished Member of the Year award to Renee LaBruyere, Senior, Business Development Manager, Horner & Shifrin.

Associate of the Year: Renee LaBruyere, Senior, Business Development Manager, Horner & Shifrin

LaBruyere has made significant contributions to the chapter. She served as the Programs Chair, organizing and scheduling monthly programs to advance members’ knowledge and provide networking opportunities. She recently was elected to serve as secretary on the chapter’s board.

Facility of the Year: City Foundry STL

IFMA St. Louis honored City Foundry STL as the region’s Facility of the Year. Gary Wood, left, COO and Founder of Stryker Construction and IFMA St. Louis President Elect, presented the award to Rob Soete, General Manager of City Foundry STL.

Located on 15 acres in the heart of St. Louis, the Lawrence Group transformed the former century-old manufacturing facility into a mixed-use development. The $200 million first phase now boasts its centerpiece food hall, as well as retail, entertainment and office space. The award was presented to Rob Soete, General Manager of City Foundry STL.

IFMA St. Louis offers its members a learning and networking environment among its diverse membership and supplies its members with the tools to achieve their professional goals. Started in 1985, IFMA St. Louis has nearly 200 members representing small and Fortune 500 companies throughout the region. Considered a leader among local chapters, IFMA St. Louis holds monthly programs to enhance members’ knowledge and provide networking opportunities. IFMA members also value their membership to build their careers, seek counsel and advice from other facility management professionals, access a variety of resources and achieve professional certification. Represented in 142 chapters and 16 councils worldwide, IFMA members manage more than 78 billion square feet of property and annually purchase more than $526 billion in products and services. For more information, visit www.ifma.org.

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Input Costs Rise Faster than Bid-Price Index in June

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Starts Surge, ConstructConnect Reports

Submitted by the AGC.

Contractors’ input costs rose faster than their bid prices from May to June but bid prices rose faster over the past 12 months, according to Bureau of Labor Statistics data posted on Thursday. Specifically, the producer price index (PPI) for material and service inputs to new nonresidential construction increased 1.1% for the month and 16.8% year-over-year (y/y). The PPI for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—rose 0.5% for the month and 19.8% y/y. Costs rose faster than bid prices last month for a variety of inputs in the cost index: diesel fuel, up 14% for the month and 111% y/y; prepared asphalt and tar roofing and siding products, 3.2% and 22%, respectively; concrete products, 1.7% and 14%; plastic construction products, 1.5% and 27%; insulation materials, 1.2% and 16%; and brick and structural clay tile, 1.0% and 9.3%. In contrast, the PPI for lumber and wood products slumped 15% in June and 27% y/y. PPIs for metals also slid last month: aluminum mill shapes, down 5.2% for the month but up 20% y/y; steel mill products, -1.8% and 22%, respectively, and copper and brass mill shapes, -1.6% and 0.6%. Bid prices, as measured by PPIs for new buildings, fell 0.1% for the month but climbed 30% y/y for new warehouse construction; and increased 0.2% in June and 16% y/y for both school and health care buildings; 0.8% and 24%, respectively, for industrial buildings; and 1.0% and 21% for offices. PPI increases for new, repair, and maintenance work by subcontractors amounted to 0.8% for the month and 21% y/y for concrete contractors; 15% and 18%, respectively, for roofing; 1.4% and 14% for plumbing; and 0.4% and 12% for electrical contractors. AGC posted tables of construction PPIs. Readers are invited to send information about costs and supply issues to ken.simonson@agc.org.

The value of construction starts in June rose 3.6% y/y in current dollars (i.e., not inflation-adjusted) and increased 15% year-to-date for the first half of 2022 compared to January-June 2021, not seasonally adjusted, data firm ConstructConnect reported on Friday. Nonresidential building starts jumped 29% year-to-date, with institutional starts up 1.9%, commercial starts up 0.8%, and industrial (manufacturing) starts up 316%. Engineering (civil) starts leaped 24% year-to-date, with road/highway up 30%, water/sewage up 23%, power and other miscellaneous down 4.1%, bridges up 47%, dams/marine up 13%, and airports up 20%. Residential starts edged up 0.7% year-to-date, with single-family up 1.3% and apartments down 1.0%.

“The first year of new settlements reached from January through June of 2022 for union craft workers in the construction industry had an average increase of 3.6%” for wages, fringe benefits, and other employer payments, the Construction Labor Research Council reported on Friday in its June Settlements Report. “There has been noticeable growth in the size of increases the past year and a half. After a modest dip of 0.2% in 2020, likely due to COVID-19, there was sharper growth in 2021 and so far in 2022. That is, the 0.8% change in the size of increases from 2020 to [the second quarter of 2022] is the same amount as the growth from 2013 to 2019 (6 years). It appears that high inflation has impacted union craft pay rates more than two other recent factors—the craft labor shortage and COVID-19.” Among 14 crafts, settlements ranged from 4.3% for carpenters to 2.3% for plasterers. Among the nine Census regions, “the Northwest had the largest increase to date this year [5.7%], and that is on top of the largest increase percentage in 2021,” 4.0%. The smallest increase so far in 2022 was 2.6% in the West North Central region.

The Dodge Momentum Index in June reached a 14-year high, up slightly from an upwardly revised May reading and up 9% y/y, Dodge Construction Network reported on July 11. The index “is a monthly measure of the initial report for nonresidential building projects in planning, [which has been] shown to lead construction spending for nonresidential buildings by a full year. In June, the commercial component of the Momentum Index rose 4% [and 11% y/y], while the institutional component fell 6%” but rose 5% y/y. “Commercial planning in June was led by an increase in warehouse projects, while most other commercial buildings were flat. For institutional planning, a decrease in education projects in June dragged the sector lower, although healthcare increased.”

“Economic activity expanded at a modest pace, on balance, since mid-May; however, several districts reported growing signs of a slowdown in demand, and contacts in five districts noted concerns over an increased risk of a recession,” the Federal Reserve reported on Wednesday in the latest “Beige Book” summary of informal soundings of businesses by district. Nine of the 12 districts “noted moderation in prices for construction inputs such as lumber and steel.” The district headquartered in San Francisco reported, “Contacts noted that commercial real estate permits and construction slowed down somewhat.” The Dallas Fed reported, “a few [staffing-firm] contacts cited some slowing in demand, particularly for construction workers.” The Kansas City Fed reported, “Demand for multifamily housing construction remained elevated. However, financing conditions for new projects tightened recently, leading to fewer projects being initiated in recent weeks. Still, backlogs for multifamily housing development projects remain large by historical standards.” The Minneapolis Fed reported, “Commercial construction was flat since the last report. Contacts said overall demand was still healthy, but persistently high material costs, supply chain difficulties, and rising borrowing costs were having an increasingly negative impact. New projects and total active projects over the most recent six-week period (ending mid-June) were lower,” y/y. Readers are invited to report project cancellations and postponements to ken.simonson@agc.org.

McCarthy Marks Topping Out For 1M sf Mixed Use Development

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McCarthy Building Companies has secured in place one of the last steel beams to complete the framing of Forsyth Pointe, a nearly one-million-square-foot mixed use development occupying an entire square city block in the prestigious central business district of Clayton, Mo., the county seat of St. Louis County.

The development by US Capital Development features two steel-framed, all glass Class A office towers with street-level retail space offering spectacular views of the adjacent 30-acre Shaw Park.

Highlights include Commerce Bank Tower, a 10-story, 265,000-sq.-ft. high-rise at the intersection of Forsyth Blvd. and Meramec Ave., as well as an 8-story, 210,000-sq.-ft. west tower at the intersection of Forsyth Blvd. and Brentwood Blvd.  In addition, the development includes more than 20,000 sq. ft. of street-level retail space and a 7-level (1,250 car) parking structure connecting both towers and extending 2.5 levels underground.

Designed to achieve LEED Silver certification, a signature amenity will be the 45,000-sq.-ft. (over one-acre)  “green roof” open-air garden terrace built over the parking structure that will be available for tenants to enjoy. Additional amenities include plans for a 10,000-sq.-ft. fitness center and ground-floor arts and entertainment venue.

McCarthy Building Companies, Inc. is the oldest privately held national construction company in the country – with nearly 160 years spent collaborating with partners to solve complex building challenges on behalf of its clients. With an unrelenting focus on safety and a comprehensive quality program that span all phases of every project, McCarthy utilizes industry-leading design phase and construction techniques combined with value-add technology to maximize outcomes. Repeatedly honored as a Best Place to Work and Healthiest Employer, McCarthy is ranked the 13th largest domestic builder (Engineering News-Record, May 2021). With approximately 6,000 salaried employees and craft professionals, the firm has offices in St. Louis; Atlanta; Collinsville, Ill.; Kansas City, Kan.; Omaha, Neb.; Phoenix; Las Vegas; Denver; Austin, Dallas, and Houston; and San Diego, Newport Beach, Los Angeles, San Francisco, San Jose and Sacramento, Calif. McCarthy is 100 percent employee owned. More information about the company is available online at www.mccarthy.com or by following the company on Facebook, Twitter, LinkedIn and Instagram.

Pennington, Keeley lead United Way 2022 Campaign

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ST. LOUIS— United Way of Greater St. Louis announces that Penny Pennington, managing partner of Edward Jones, and Rusty Keeley, CEO of Keeley Companies, will serve as chair and co-chair, respectively, of its 2022 annual community campaign. Additionally, Arica Harris, director of banking and payment operations at Edward Jones, will serve as vice chair. 

This year, United Way of Greater St. Louis is celebrating 100 years of impact in the St. Louis region.

“United Way and its agency partners play a unique and vital role in the success and resilience of our regional growth by providing critical wraparound services and support to our neighbors, family and friends,” said Pennington. “Like Edward Jones, United Way is celebrating its centennial anniversary in 2022, and I am proud of our strong and enduring partnership. Together, Rusty, Arica and I are looking forward to partnering with local leaders, companies and community volunteers to help even more people through the United Way campaign this year.”

United Way’s campaign supports more than 160 Safety Net agencies that help 1 million people in 16 counties throughout Missouri and Illinois. Its support across the region focuses on basic needs, youth success, health, financial stability and crisis response.

“United Way of Greater St. Louis has shown their dedication to uplifting the St. Louis community for decades through philanthropy, giving, and volunteer leadership, and I am humbled to join them as they continue their mission,” said Keeley. “I look forward to working on this year’s campaign that will go towards helping countless individuals and families throughout the community.”

In addition to funding its health and human service partners, United Way manages the region’s Volunteer Center and 2-1-1 Helpline, a 24/7 resource connecting people to programs and services for a variety of needs.

“Through its network of safety net agencies, United Way works to make the St. Louis region a great place to work and live and inspires so many people to realize their full potential,” said Harris. “United Way is a powerful change agent and I’m excited to expand this work even further through my role as vice chair this year.”

United Way’s annual campaign begins in early September and runs through the fall.

“We are thrilled to have Penny, Rusty and Arica leading this year’s campaign efforts as each of them exemplifies leadership, generosity and community,” said Michelle Tucker, president and CEO of United Way of Greater St. Louis. “Their knowledge and business experience will be invaluable in helping us find new and innovative ways to engage our supporters and expand our impact in the St. Louis region. We are very grateful and excited to have them on board and to see all that we will accomplish during this special centennial year.”

Pennington
Keeley

Sign of the Times: MO, IL Public Projects Draw Only One Bidder

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Within the past 45 days, two major public-sector building project lettings – one in St. Louis, the other in Springfield, IL – have been left wanting for bids from contractors.

The first project, phase two of a proposed expansion to St. Louis’ downtown convention center, met with only one bidder for phase one and no bidders for phase two. The contract to build the second half of the Cervantes Convention Center expansion/modernization, estimated by city officials to cost $70.8 million, received nary a bid. Phase one of the project, awarded in early May to the only bidder – Ben Hur Construction – included approval of a $123.9 million contract with the construction firm, 65 percent higher than what the city initially budgeted.

The second project, the largest-ever renovation of the Illinois State Capitol, attracted only one bidder with a price tag that came in 43 percent over the state’s job cost estimate. Core Construction Services of Illinois Inc. was awarded the $243.5-million project, for which the state budgeted as part of a 2019 capital improvements package. Four contractors expressed interest at a pre-bid session, according project architect Andrew Aggertt, but only one firm bid on the contract.

“I am not surprised,” said Leonard Toenjes, president of the Associated General Contractors of Missouri, referencing the lack of bidders. “These longer-term projects, with inflation as it is and all the different work opportunities there are, dissuades contracting from trying to work in the public low-bid market because that carries a lot of risk, especially now.”

In contrast to private-sector construction projects, taxpayer-funded public builds don’t allow for provisions such as escalation clauses, according to Toenjes, to help minimize the risk contractors bear when there are supply chain unknowns. Private sector project agreements also frequently include flexibility in working with the project owner when diesel prices double over the course of the project timeline.

“The long-term nature of some of these projects often requires that contractors go back to owners and restructure various portions of the contract to account for dramatic cost escalations,” Toenjes said. “These candid constructor-supplier-owner conversations are often needed these days to keep a project on track. In a public low-bid, hard-bid situation, this type of flexibility often is not possible.”

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