“High Prices” Decree 2021: deadline of December 8, 2021 for enterprises to submit a compensation request for the additional costs incurred due to the increase in construction material prices.
On November 23, 2021, the long-awaited decree of the Ministry of Infrastructure dated November 11, 2021 was published in the Official Gazette, which reports the increase in prices of the main construction materials recorded in the first half of 2021 compared to the average prices of 2020.
In particular, the recent decree, which notes a significant general increase in prices, confirms that the largest variations concern steel, with an increase exceeding 40% (and even 76% for some steel materials), wood (+43%) and copper (+32%).
At the same time, the Ministry of Infrastructure published a circular concerning the procedure that economic operators holding public contracts must follow to request compensation from their contracting authorities for the additional costs incurred as a result of the aforementioned price increases.
In particular, construction companies acting as contractors that have been affected by the high price of materials used in works executed and accounted for in the first half of 2021 are required to submit the compensation request to the contracting authority and, in particular, to the works director, within 15 days from the date of publication of the aforementioned decree in the Official Gazette and, therefore, by Wednesday, December 8, 2021.
The request must also contain an indication of the construction materials used, whose significant price variation is reported in the Decree of November 11, 2021, and the Works Director, having verified such quantities, must calculate the additional burden borne by the contractor, determining the amount of compensation, both for works accounted for by measurement and for those accounted for as a lump sum.
Moreover, the circular of the Ministry of Infrastructure precisely sets out the calculation to be performed to determine the compensation in question; in particular, to the quantities of individual materials used in works executed in the first half of 2021, the increases or decreases in the respective prices recorded by the aforementioned decree are applied with reference to the date of the tender, exceeding 8% if referring exclusively to the year 2021 and exceeding 10% overall if referring to multiple years.
The project manager (R.U.P) and/or the manager of the contracting authority appointed for this purpose therefore proceeds to validate the calculations received from the works director, to verify the availability of funds in the economic framework of each individual intervention for the purpose of price compensation, and, where necessary, to request the contracting authority to use additional available funds or that will become available, as provided for by the regulation, and effects the relative payment, possibly taking advantage, in case of insufficient resources, of the special Fund established at the Ministry of Infrastructure.
Finally, it should be noted that the compensation in question is not subject to auction discount and is determined net of any compensation previously granted.
