The Brexit transition period ended on 31 December 2020. For anyone responsible for a building’s repair budget, the headlines about trade deals mattered less than three practical questions: will materials cost more, will they arrive on time, and will there be enough people to do the work?
Prices and lead times
Many building materials, and many components inside them, cross a border before they reach site. New customs arrangements added cost and delay, and the effect combined with pandemic disruption to supply chains. By the end of 2020 contractors were starting to price that risk into tenders, and some were reluctant to hold prices for long.
What it meant for planned maintenance
A ten year maintenance plan is a budget built on today’s rates. When rates move quickly, the plan needs to be reviewed more often, and the early years need a realistic allowance for price movement. Good practice treats a PPM report as a living document for that reason. For a managing agent, that means service charge budgets and reserve fund contributions that stand up when the works are tendered.
What it meant for tenders
We advised clients to tender sooner rather than later where works were urgent, to allow time for longer lead times, and to look carefully at how long tender prices were held. On a JCT contract, how price movement is dealt with is a decision to make before the contract is signed, not after.
What to do now
- Review any PPM plan more than two years old against current rates.
- Build realistic lead times into programmes for specialist materials.
- Decide how price risk is shared before tenders go out.
See our Planned Preventative Maintenance and Contract Administration services, and a ten year plan a managing agent can budget against.