Garden building requires many different products and materials, all arriving from diverse sources, suppliers, manufacturers and countries. Compiling the products library for any project highlights the importance of efficient monitoring, buying, selecting, resourcing and delivery processes even in previous ‘normal’ times, and since the pandemic, there is scarcely a scheme that has not met with materials shortages or significant increases in price.
Today, the world faces many challenges due directly because of the Russian/Ukrainian war, which has resulted in some worrying increases in prices, especially fuel and raw materials, as Nations become concerned and stock pile products for their domestic markets. Although Britain is not directly involved, the war will have some impact on our markets for a short to medium term, at least until we start to produce more of our own energy – how much of an impact we will have to wait and see.
Not only delivery dates, ability to order specific products in the sizes and colours selected by the designer or client, but lead times and costs of everything from the materials to transport has caused serious problems for landscaping contractors everywhere. Although customers will be aware of these issues – if they read the papers or listen to the news – they rarely relate the information and think of it as affecting landscapers.
I would estimate that the average lead time on any landscaping at the time of writing (Spring 2022) is at least three months, probably nearer six months from the production of a quotation to start date. Trying to guesstimate prices rises over a six-month period is fraught, as some are rising at an alarming rate. Timber costs have risen 30 to 40% in 2021, and the quality of much of that available is lower, and probably unacceptable on a detailed scheme such a landscape project, which relies on straight non-split materials for detailing.
Container costs have risen from £1,000 to £10,000 plus in the space of a single year, with the result that prices of materials such as porcelain or sand-stone paving has risen dramatically.
How to manage those rises is the biggest problem for contractors working on fixed price schemes, won largely through price in the first place. Even the best landscapers will lose jobs on price – although they may not have supplied the lowest tender, money will have played a part in the selection process.
Therefore, it is a frightening matter to have to go back to a customer and ask for more money due to unforeseen increases in cost of materials, before or during construction. Even with strict terms and conditions, any conversation on the subject of additional costs for the same quantity of product is never going to be an easy one. Rather than hiding a paragraph within the body of your Terms, I suggest a different approach.
Include a highlighted comment in your quotation, drawing attention to an attached document concerning prices and material availability, which clearly sets out your policy on the subject.
Something along the following lines;
MATERIAL COSTS AND AVAILABILITY
Sargent Landscapes Limited have produced the pricing schedule and therefore the original quotation based on prices as at the time of tendering. Due to world-wide shortages or materials, and huge price rises in container and shipping costs since the pandemic, we have chosen to provide you with our tender based on current rates, at the time of tendering, rather than try to guess the prices at the time we would place an order prior to commencing work on your project.
We are confident in our labour and other construction costs, and will hold those figures regardless of material cost rises. In fairness to you, our valued customer, we will assess the actual costs of the materials schedule before placing an order, to ensure the lowest possible rates (rather than simply guessing at those future prices) This matter will be dealt with using a Variation Order, to be agreed at the time.
In the event of a shortage or non-availability of a product, we will offer alternatives, either in manufacturer or lower cost if possible/requested. This matter will also be subject to a Variation Order to comply with our contractual obligations.
We have elected to use this process to avoid any disruption or delay in commencing and/or completing your project. Until world matters resolve themselves, and supply chains are back to normal, we can only try to mitigate these potential price rises by finding the least expensive alternatives in the interests of our esteemed customers.
Although this option is far from ideal, the alternative would be a client who insists on having everything delivered and installed on time, and within budget. Contractually, without such a caveat, the landscaper would be legally obliged to perform within the terms of the contract, with anything less likely to become the subject to a Breach of Contract claim.
Alan Sargent FCIHort MPGCA
www.landscapelibrary.co.uk