Under B&P Code 7028.15, when a California contractor submits a bid that includes both materials and labor, and the actual material costs increase by 25% after contract award due to market conditions, what is the contractor's legal obligation?
Correct Answer
C) The contractor must absorb all cost increases unless the contract includes an escalation clause
California law generally holds contractors to their bid prices unless specific contract provisions allow for adjustments. B&P Code 7028.15 emphasizes contractor responsibility for accurate bidding. Material cost escalation clauses must be explicitly included in contracts; otherwise, contractors bear the risk of cost increases in their estimation.
Why This Is the Correct Answer
California law generally holds contractors to their bid prices unless specific contract provisions allow for adjustments. B&P Code 7028.15 emphasizes contractor responsibility for accurate bidding. Material cost escalation clauses must be explicitly included in contracts; otherwise, contractors bear the risk of cost increases in their estimation.
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