To whom it may concern,

We are very concerned, as many of my fellow builders are,  with the building materials market volatility.  Pricing has escalated far beyond controllable means. We have in excess of 2.5 million of new construction residential homes to build in the Richmond area and will not issue our contracts to our investor clients as we can not guarantee that the contract amount will hold by the time the materials are delivered to the job site. We are planing to add language to our contract that would allow for the contract amount to be modified to  recapture the material cost increases between the time of contract execution and actual delivery dates, plus standard and reasonable overhead and profit. Conversely, should the material amount drop below the original contracted amount then a credit would be issued to the client.

In my opinion, T & M would not be practical on large projects. Very accurate cost accounting methods would have to be adhered to, insuring the process is accurate and fair to both parties. Copies of all material receipts and payroll logs with time sheets would have to be used and all of this only adds to the operating overhead and accounting of the project.  

If we are to be permitted to use the contract language that I am proposing, it would only be used when suppliers will not or can not hold firm to their quoted material amounts. At this time several of our larger suppliers are holding their present quotes until March 15, 2022. Material need not be delivered to hold the price, but a purchase order issued and the quote signed off and accepted by us, the contractor and them, the supplier. 

We are all working through very challenging times and we all will have to work together for a successful and reasonable outcome. I appreciate all of your efforts to recognize the negative forces that we are faced with as building contractors and the fact that you, as a governing body, are willing to create an open forum to entertain ideas and suggestions that will clear a path for our collective continued success.

Sincerely,

W. L. Pangburn, President & Managing Member of Historic Contracting, LLC (DBA) Savoy Properties 804-241-1955