Managing Rising Costs & Supply Chain Risk Under NZS3910
Rising costs and supply chain disruption are no longer low-probability risks for New Zealand's construction industry. Following years of global economic volatility, material shortages, and labour pressure, cost escalation has shifted from a contingency line item to a foreseeable project condition — one that must be addressed across contract formation, procurement strategy, and risk allocation.
This free guide is written for contractors, clients, project managers, quantity surveyors, and principals involved in construction and development in New Zealand. It explains how cost escalation risk should be identified, planned for, and managed at every stage of a project — from contract formation through to practical completion.
The guide covers how the 2023 edition of NZS 3910 removed the standard cost fluctuation clause that existed in the 2013 version, why fixed price and lump sum contracts can place significant financial pressure on contractors during periods of inflation or market disruption, how early procurement strategies can help lock in pricing before escalation occurs, and how Special Conditions can be used to share cost risk where projects span multiple years or involve volatile materials.
It also addresses supply chain disruption and the contractual tools available under NZS 3910 — including variations, extensions of time, and engineer instructions — as well as the critical role proactive project management plays in identifying risks early and ensuring contractual mechanisms are applied correctly before costs spiral.
What you'll learn:
Why the 2023 NZS 3910 edition requires project teams to address cost fluctuation risk at contract formation
How fixed price contracts allocate escalation risk — and where that creates exposure
Special Conditions, target cost models, and shared-risk pricing strategies
Early procurement approaches for long-lead and volatile materials
How extensions of time differ from cost compensation under NZS 3910
The role of early warning notices in protecting all parties from uncompensated cost increases
How proactive project management reduces the likelihood of commercial disputes
Download the free guide to better understand how rising costs and supply chain risk affect your project, your contracts, and your obligations - and what good practice looks like across contract strategy, procurement, and delivery in New Zealand’s built environment.
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