This Law360 article by Akerman attorneys Stacy Bercun Bohm, John Neary, Katrina Flores Larmoyeux, and Daniel Miktus explores strategies for mitigating the financial and scheduling risks posed by tariff-induced material price escalations in construction projects. Our authors emphasize the importance of robust construction agreements, particularly price escalation clauses, to address cost overruns and delays. These clauses allow stakeholders to predefine how increased costs will be managed, offering alternatives like capping exposure, requiring proof of cost escalation, or utilizing allowances for specific commodities.

The article also highlights practical measures such as early material procurement, diversifying suppliers, and monitoring market trends to mitigate risks. Additionally, tools like contingency clauses and performance bonds can provide further protection against unforeseen impacts. By combining detailed contract provisions with proactive procurement strategies, owners and contractors can better navigate the challenges of volatile material costs and maintain project stability.