Caervarvon Township may adopt an escalator clause regarding upcoming road projects within the community.
The clause would allow contractors to adjust prices on work to be done due to fuel costs. If pre-set levels were met, an escalator would be put in place to ensure that if the cost of oil went up, contractors could recover costs. If the cost of oil were to go down, the contract price would also go down. Without the clause, contractors unsure of potential changes in the cost of oil may be forced to bid highly on the contract price.
Township Engineer Bill Witman sent the clause to board members prior to Wednesday night’s workshop meeting. Present members saw it as a potential gamble as a result of limited details about the clause’s specifics and wanted more information. Witman was not at the meeting to answer questions.
“We really have no idea [about clause specifics] right now and we have to pass it to basically know what’s in it,” said Vice Chairman, Allen Styer.
“When bids are open, you still have a right to decide if you are going to award bids or not,” said Township Administrator, Randy Miller. “You could also come back and say, ‘OK, we didn’t like these prices. We are going to re-bid it without the escalator clause.’ Those are really the only two things I know for sure right now.”
Board members were skeptical of the clause’s lasting impact on costs and hindrances that could arise as a result of its passing.
“On this route, basically you’re not locked in,” said Styer. “You don’t know what oil will cost in the fall, or whatever. I’d rather have a locked in price than something that might go up and we’re going to need it. It’s just a matter of how accurate will the contractor be at estimating what the cost of fuel will be in the future.”
“Obviously we all have a lot of questions,” said Supervisor Paul Whiteman. “I say we wait to talk to someone a little more knowledgeable about it before we sit here and adopt it.”
The board aims to make a final decision at the regular meeting April 8.