A contractor discovers that a key material supplier has gone out of business two weeks before delivery is needed. The material is critical to maintaining the project schedule. What is the best course of action?
Correct Answer
B) Quickly identify alternative suppliers and expedite procurement, even at higher cost
When facing a critical material shortage that threatens the project schedule, the priority should be to quickly secure alternative sources, even at higher cost, to maintain the schedule and avoid more expensive delay damages.
Why This Is the Correct Answer
Option B is correct because maintaining project schedule is typically more cost-effective than dealing with delay damages, liquidated damages, and potential contract penalties. A proactive contractor should exhaust all reasonable alternatives to secure materials before accepting delays. The additional cost of expedited procurement is usually less than the total cost impact of project delays, which can include extended overhead, labor costs, and potential legal consequences.
Why the Other Options Are Wrong
Option A: Immediately inform the owner of the delay and request a time extension
While transparency with the owner is important, immediately requesting a time extension without first attempting to solve the problem shows poor project management and may not be legally justified if alternative solutions exist.
Option C: Redesign the project to eliminate the need for this material
Redesigning the project would require owner approval, design professional involvement, potential permit modifications, and would likely cause more delay than finding alternative suppliers. This is an extreme measure that should only be considered after other options are exhausted.
Option D: File an insurance claim for business interruption
Business interruption insurance typically doesn't cover supplier failures, and filing a claim doesn't solve the immediate scheduling problem. Insurance claims also take time to process and may not be covered under standard policies.
Memory Technique
Think 'SOLVE before SHELVE' - solve the material problem before shelving the schedule and accepting delays.
Reference Hint
Florida Building Code - Administrative Chapter 1, Contract Administration sections, and AIA Contract Documents regarding contractor responsibilities for material procurement
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