Each Monday, we'll let you know what's coming in the week ahead, including important residential and commercial report releases, as well as our own feature articles.
First installment in "The Dotted Line" contract series — Jan. 12
A construction contract is one of the most vital components of a project, yet one of the least-discussed. While workers on job sites have hard hats on hand for protection, contracts serve as somewhat of an executive's hard hat, offering crucial protections and safeguards. We want to bring the unsung hero of a successful construction project into the spotlight with our new monthly series, "The Dotted Line."
In our first installment on Tuesday, Jan. 12, we will take an in-depth look at the popular cost-plus-fee with a guaranteed maximum price contract. This contract type has garnered attention recently after the maximum price contract for the beleaguered Boston Green Line extension was called into question as one of the sources of the project's significant cost overruns. Analysts have cited other factors as contributing to the near $1 billion cost increase, but the Boston rail authority still removed all lead contractors from the project.
What are the benefits and drawbacks of using these different types of contracts, and what types of jobs are the various contracts best suited for? Each month this year, we will examine a different contract type and explore these questions with expert input.
Construction startups feature article — Jan. 14
Startups have been making major news in the construction industry. Last year, Uptake, the predictive data analytics company backed by equipment giant Caterpillar, was named Forbes' hottest startup of the year. Fieldwire, a startup that offers mobile and web platform services for construction projects, brought in $6.6 million in its first round of financing, and women-owned Bridgit created a construction "punch list" app, Closeout, which the owners presented at the 2015 Google Demo Day: Women’s Edition.
Rhumbix, a mobile platform that collects data from construction workers' smartphones in an effort to provide "data-driven insights" for construction managers, secured $6 million in Series A funding. BuildingConnected raised $8.5 million for its construction bid management platform. And construction industry software leader Autodesk even got in on the action with an investment in drone startup Skycatch.
Will the growing construction startup trend continue into 2016? And which other industry players will test the waters of partnering with these newcomers? In our feature article on Thursday, Jan. 14, we will examine the growing presence of startups both geared toward building professionals and backed by industry giants.
Producer Price Index — Jan. 15
The monthly Producer Price Index report from the Bureau of Labor Statistics will be released Friday, Jan. 15. That afternoon, the Associated Builders and Contractors will offer their take on the data, and we'll cover both reports in a combined story.
Last month, construction material prices fell 0.4% between October and November and 4.2% year-over-year. November was the fifth consecutive month of declines in construction industry inputs in the Producer Price Index.
ABC Chief Economist Anirban Basu attributed the continued decline in material prices to "a stronger U.S. dollar, weak economic performance among major emerging countries like China, Brazil and Russia, ongoing softness in economies in Europe, OPEC’s recent decision to maintain high levels of output, elevated levels of oil and gas output from private companies wrestling with debt service payments and the impact of energy-saving technologies."
Basu predicted that prices could start to soon level off, but he said there likely will not be a major increase in prices anytime soon. Despite possible negative implications about economies in other countries, the lower material prices could signal good news for builders looking to capitalize on the cheaper commodities during a construction boom across the U.S.
Will the five-month streak of monthly price decreases continue this month?
