The impact of a sudden shift from record high demand last summer to cancelled projects, depressed markets and falling materials and labor costs this spring has spurred a once-in-a-generation poker game of renegotiation on projects across the country.
While many in the industry are reluctant to discuss the trend for attribution, industry sources say the temptation for owners to renegotiate pricing is widespread. Here is the scenario: materials costs were rising across the board in the spring and summer of 2008. Owners, eager to lock in prices, pushed their general contractors and subcontractors to lock in their numbers. Many of these projects are now moving into the construction phase amid falling prices.