The construction industry has and will continue to grapple with low margins, often challenged by prolongation of fixed-cost contracts and uncertainty in the supply chain. With termination and damages clauses written into contracts, many businesses are unable to put the brakes on them. 

As margins erode and losses set in, a firm’s means of survival is often to mitigate additional damages by renegotiating extensions of time and monitor the solvency and delivery from the extensive supply chain below. 

As contractors see the closing of multiple legacy contracts bid before and during the pandemic, they are looking ahead at the pipeline to preserve margins. There is a different feel this time to the bid and procurement environment in the industry, with a large number of businesses scaling down their operations either through a reduction of contracts or an exit from large-scale, complex agreements knowing they can protect margins through the careful selection of projects.