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RAIC issues advisory on implications of rising costs

RAIC issues advisory on implications of rising costs

OTTAWA — The Royal Architectural Institute of Canada (RAIC) has issued an advisory notice to its members urging them to exercise vigilance dealing with contracts given the major spike in construction costs in the past year.

The notice was sent under the name of Gregory MacNeil, the RAIC’s vice-president of practice, with the subject line Extraordinary Market Conditions or other Factors not Reasonably Foreseeable.

With costs up approximately 35 per cent in the last 18 months, vigilance is urged with respect to “contract definitions, terms, conditions and clauses related to construction budgets, construction costs and construction cost estimates.”

The June 20 statement said the RAIC is monitoring the situation through its relationships with the Canadian Construction Document Committee and other AEC partner organizations and through contacts with architects, engineers and constructors across Canada.

“We frequently monitor construction costs, material costs, supply chains and labour market conditions, etc. that can adversely affect our RAIC member’s ability to meet their practice demands or contractual obligations,” MacNeil states.

When using or executing the RAIC Document Six Canadian Standard Form of Contract for Architectural Services, the RAIC practice department and RAIC practice support committee recommend that close attention be paid to A19, GC 4.4, GC 4.5 and GC 4.6 due to the presence of construction cost volatility and schedule creep drivers such as cost-push and demand-pull inflation, interest rate adjustments, labour disruptions, labour shortages, material scarcity, supply chain disruptions, geopolitical influences and changing monetary policies.

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