Consumer Price Index CPI values
I do General Contracting work in the western suburbs of Illinois, we had school job to do last year and the district postponed it due to Covid related issues. They signed the contract to start work in 21’ and agreed to a 2% increase for labor and materials but as we know now that does not even come close in the construction industry now. We will honor the 2% and cut our losses, but our issue is they slipped in the contract an increase to be capped at the lesser of a maximum of 2% or the inflation amount determined by the 2020 CPI set in early 2021. They are stating that the CPI is only 1.4% and the data they sent as backup is clearly missing something? It was only for Urban wage Earners and Clerical workers. And Which seams to have nothing to do with the construction industry. There is also a Covid section which states that some of the program has been suspended since March 16, 20’ and that some of the numbers of prices are unavailable. Can you possibly point us in the right direction and or give us some insight as to where we can find the true CPI increase that actually pertains to the constructions industry. Our contract is approximately 3.8 mil. So it is a significant amount we are trying to get back. Any help or direction would be greatly appreciated. We read your column in the Chicago Tribune weekly. Look forward to hearing back from you.
Thank You,
Terry Says
First of all, the April CPI just reported showed a gain of 4.2% year over year! I don’t know what specific index is specified in your contract, but it must be at least 2%. Check the various measures of CPI here at the Bureau of Labor Statistics.
That’s where you’ll find the 4.2% statistic –lower right corner article. (The urban workers were all out of work for the past year — so no increases in that particular CPI!)
I hope your project doesn’t include lumber! The cost soared 700% in recent months, though it has backed off slightly. I think you have room to negotiate on these costs — all of them. Just let them try to find another contractor — who is available in this busy time — at even nearly the price they are trying to squeeze out of you. It doesn’t make sense to do the work at a sure loss! Just my opinion!
