Contractors seeking steel price adjustment.

The Association of General Contractors board of directors has responded to the steel price escalation by approving a resolution urging public and private owners to permit steel price adjustments in both new and existing contracts.

Contractors meeting last week at AGC's annual convention recently reported a variety of problems related to steel.

Various contractors reported their suppliers are, or soon will be, allocating rebar, sprinkler pipe, metal wall studs and fasteners, and guardrail materials. Prices are rising at ever-increasing rates. Suppliers have added heavy surcharges to previously "firm" prices and told contractors they must pay or forgo delivery. Suppliers have shortened the period for which they will quote firm prices on new inquiries to 15, 7, 3 or even one day. Various contractors report their suppliers are, or soon will be, allocating rebar, sprinkler pipe, metal wall studs and fasteners, and guardrail materials.

Immediately before the AGC vote, Mary Peters, Administrator of the Federal Highway Administration (FHWA), announced in an address to AGC's Highway and Transportation Division and a letter handed to AGC Chief Executive Officer Stephen Sandherr that FHWA "supports the appropriate use of price adjustment clauses for products, including steel, when they can reduce contingencies in construction bids and provide for an equitable adjustment for costs that may increase during the life of a project.

"Although we do not mandate price adjustment clauses, the State transportation departments may use them as appropriate for steel or any other products included in future contracts.... However, our current policy does not allow price adjustment clauses to be added, retroactively, to existing contracts. We are reexamining our policy to determine whether a change in current policy is appropriate."

The American Assn. of State Highway and Transportation Officials has circulated drafts of a proposed price adjustment clause specification.

Bexar Concrete of San Antonio, a fabricator of prestressed concrete for bridge girders and parking structures, laid off more than 40 workers became it could not obtain steel strand after a 77% anti-dumping duty on foreign strand led other users to turn to the only two U.S. suppliers, depriving Bexar of its supply. Bexar's inability to produce bridge girders has led to delay of one bridge project and threatens two of the largest highway projects in the nation.