A supplier asks for a steel price increase after award, but the subcontract has no escalation clause and the material was not changed. What should the contractor review first?
Correct Answer
A) Whether the subcontract gives entitlement to the requested price adjustment
Without a change or escalation clause, entitlement to a price increase depends on the subcontract terms. Other choices do not address contractual entitlement.
Why This Is the Correct Answer
Without a change or escalation clause, entitlement to a price increase depends on the subcontract terms. Other choices do not address contractual entitlement.
Why the Other Options Are Wrong
Option B: Review whether market prices changed after the subcontract was signed
The trap in B is The supplier's preferred color chart. That selection is wrong because it answers the Escalation clause absent prompt with the wrong practical move.
Option C: Review whether the bid bond can be amended to cover a steel price increase
Choice C gives A new bid bond form. Its specific error: the option answers a paperwork, payment, or bonding issue.
Option D: Accept the price information as submitted
Choice D (The punch-list format) is rejected because the choice would not get the project to Whether the subcontract gives entitlement to the requested price adjustment, which is the Escalation clause absent result verified by the source.
Memory Technique
Remember escalation clause absent by its jobsite consequence: the correct move points to Whether the subcontract gives entitlement to the requested price adjustment.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Escalation entitlement review" to confirm that Without a change or escalation clause, entitlement to a price increase depends on the subcontract terms.
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