Surety exec: Reduced workforce, higher demand among reasons for material shortages | Lawmaker: Bonds for Wis. construction projects protect taxpayers | Key to surviving increased material costs may be in project parties sharing risks
October 13, 2021
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Prices for construction materials are soaring amid greater-than-expected demand, while the sectors that produce and distribute the materials are dealing with a diminished workforce, driving costs even higher, according to a surety executive. Copper and steel products, plumbing fixtures, and lumber are experiencing the strongest impact on availability and cost.
Surety Bond or Letter of Credit: What's the Difference? Surety bonds and letters of credit (LOCs) both provide risk management for construction or development projects. To know which is appropriate to use, it helps to understand their differences. Read more.
Legislation under consideration in Wisconsin aims to increase competition for state construction projects by easing bidding requirements, and it would maintain an existing provision under which bidders must have full performance and payment bonds. Requiring the bonds "is sufficient to protect the interest of Wisconsin taxpayers," a state lawmaker said.
Increased construction material costs are putting strains on projects and raising the risk of contract disputes. A beneficial way to approach the situation is for all parties on a project to share cost risk through partnerships and contingencies, experts say.
Hurricanes that are one-in-100-year events, meaning they have a 1% chance of occurring in a single year, might become at least 3%-probability events for parts of the East Coast and the Gulf Coast by 2031, according to a report. Therefore, those areas "will face a 40-60 percent chance of experiencing a devastating hurricane between 2031 and 2050," according to the report, which urges insurers to view climate-related physical risks and transition risks more holistically.
Contractors and their subcontractors can consider price escalation clauses to curtail the risk arising from future increases in construction material costs, an attorney writes. "The clauses come in all shapes and forms" and often outline "a certain limitation or percentage guideline as to when a cost increase will be considered significant enough for cost relief," he writes.
NASBP Blog: What contractors need to know about vaccination mandates and new guidelines
(Justin Sullivan/Getty Images)
The Safer Federal Workforce Task Force recently issued its guidance regarding the COVID-19 vaccination mandate for federal employees and protocols for federal contractors and subcontractors. This NASBP Blog post features a free webinar from two attorneys with Carlton Fields that reviews the COVID-19-related guidance, including vaccine mandates, giving background for the guidelines and discussing who is covered and what is required. The presenters relate what protocols federal contractors will be expected to implement and offer tips for maintaining compliance and minimizing government scrutiny. Read more.
Oct. 20 NASBP Virtual Seminar breaks down the Cybersecurity Maturity Model Certification
Registration is open for this informative NASBP Virtual Seminar happening at 2 p.m. Eastern on Wednesday, Oct. 20. "Introduction to the Cybersecurity Maturity Model Certification (CMMC)" will be presented by Anders Erickson, Principal, Risk Advisory Services with Eide Bailly. Erickson will outline the CMMC objectives and framework, discuss the various maturity levels and domains of the CMMC, and identify the next steps in beginning to prepare for a CMMC assessment. Register for this stand-alone NASBP Virtual Seminar or register for the NASBP 2021 Virtual Seminar Annual Subscription, the entire set of Virtual Seminars for 2021 including access to the complete library of Virtual Seminars, and save! This Virtual Seminar is sponsored by Old Republic Surety. Register.
Learn about alternative dispute resolution on the new episode of the NASBP "Let's Get Surety" podcast
There is a new episode of NASBP podcast "Let's Get Surety." Bill Ernstrom of Ernstrom ADR joins the show again. This time, for the "Alternative Dispute Resolution" episode, he discusses the use of alternative dispute resolution processes to solve construction disputes. He shares various types of ADR and the advantages of those processes compared to litigation. Ernstrom also stresses the importance of reading and understanding your contract and including ADR during contract negotiations rather than waiting until a problem arises. Access this and other "Let's Get Surety" episodes from any of these systems: Apple Podcasts, Google Podcasts, Spotify, Stitcher, Audible, Amazon Music, Gaana or SuretyLearn. This episode of "Let's Get Surety" is sponsored by Nationwide.  Be Guaranteed to Succeed!
I'm not afraid to say what I'm afraid of. Does that make me fearless?
Sandra Cisneros, poet, writer, artist
Founded in 1942, NASBP is the association of and resource for surety bond producers and allied professionals. NASBP producers specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds.