Construction Contracts: How to Leverage them to Drive Efficiency and Save Money

Construction contracts

Apocryphally, the phrase “may you live in interesting times” comes from an ancient Chinese curse. In the words of Sir Austen Chamberlain, politician, and brother of the British Prime Minister, Neville, “The curse has fallen on us…we move from one crisis to another. We suffer one disturbance and shock after another.”

There is no doubt that we live in “interesting times” right now, although whether that is a blessing or a curse is up for debate. We have some very strong headwinds as we enter the second half of 2022. The inflation rate in the US is heading towards double figures (8.6% in May) and hit a 40-year high recently. This may lead to what economists call a “cost of living crisis” which could auger a recession next year. In spite of this, the current economic situation is mixed, with unemployment still less than the number of job vacancies, and some industries seem to be weathering these headwinds with ease. The engineering and construction market is an interesting case in point. Although the supply of new homes has lagged the real demand for the past decade, a potential slowdown in spending will likely have a significant impact on the residential sector. The home building industry has recovered rapidly after the pandemic. Both residential and commercial builders face the same headwinds, but some are exacerbated. 

Construction Industry in 2022

Firstly, both contractors and sub-contractors face hiring challenges. Many construction workers left the industry post-financial crash and then during the pandemic. Replacing them is certainly challenging. Secondly the well-publicized issues with supply chains, caused by both the pandemic and the Russian war in Ukraine, deeply affect the construction industry, given its dependence on physical materials. Thirdly, costs of building materials have risen 20.4% YoY and 33% since the start of the pandemic according to the Bureau of Labor Statistics (ref). 

Despite all these challenges, the residential construction sector remains strong with a 27% increase in spending in 2021 compared with 2020. In the commercial sector, spending fell 11% for the same period, but a boost is coming from government investments in large-scale infrastructure projects (roads, bridges, rail, etc.). But, this is a fragile situation. If interest rates are raised significantly to rein in inflation, then borrowing becomes more expensive and that affects mortgages and house purchases. Let’s assume supply chain issues persist. In that case, contractors and sub-contractors alike will need to sharpen up their processes to improve efficiencies and protect margins that are under pressure across the AEC landscape. 

Drive Efficiency with AI Technology

RSM, the accounting firm, in a recent post, highlights supply-chain concerns, inflation, and labor shortages as concerns for the AEC industry. RSM recommends that contractors (including subcontractors) prepare for any possible strengthening of these headwinds by, among other things, including price escalation clauses in their construction contracts.  

The negotiation of construction contracts is one area where firms in the value chain can hedge and ensure tighter control over these headwinds. Main contractors and their subcontractors, for example, can construct better, more tightly controlled contracts, which reduce risks between them. Often these firms, especially subcontractors rarely have highly skilled legal staff to manage the complex redlining and negotiation processes to get to an executable contract quickly. That is not usually their area of expertise. Outside counsel can be engaged of course but that comes at a cost. By automating construction contract negotiations, companies can save cost and reduce the time to an executable contract. Creating a playbook of the ideal contract negotiation position and strategies for all types of contracts from NDAs, MSAs, Time and Material contracts to Lump Sum contracts, and then automating the contract review and negotiation process with the counterparty has enormous potential for cost savings. This is the bread and butter of what BlackBoiler‘s contract review software does for its clients in the AEC space. Playbooks can be rapidly built within the tool by learning from historical contracts, creating rules manually, and using a guided Q&A style playbook builder, allowing thousands of contracts to be automated redlined in 70% less time than manual review. 

Take your Business to the Next Level

The outlook may be positive, but there is much that can be done to minimize further potential weakness. It starts with forward planning whether that be pre-ordering materials or tightening construction contracts to reduce risk. 

Whether the times we live in are simply “challenging” or they are indeed, “interesting” probably depends on where you sit economically, financially, and politically. For those who operate in the AEC market, it appears to be more the latter than the former. Yes, there are challenges ahead but demand is clearly there and with a focus on efficiency, many contractors and subcontractors can navigate their businesses to a bright future.  

Share this article to:

We use cookies to personalize content and to ensure you get the best experience on our website. Thank you for visiting

View more
Cookies settings
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

What information do we collect?

We collect information from you when you register on our site or place an order. When ordering or registering on our site, as appropriate, you may be asked to enter your: name, e-mail address or mailing address.

What do we use your information for?

Any of the information we collect from you may be used in one of the following ways: To personalize your experience (your information helps us to better respond to your individual needs) To improve our website (we continually strive to improve our website offerings based on the information and feedback we receive from you) To improve customer service (your information helps us to more effectively respond to your customer service requests and support needs) To process transactions Your information, whether public or private, will not be sold, exchanged, transferred, or given to any other company for any reason whatsoever, without your consent, other than for the express purpose of delivering the purchased product or service requested. To administer a contest, promotion, survey or other site feature To send periodic emails The email address you provide for order processing, will only be used to send you information and updates pertaining to your order.

How do we protect your information?

We implement a variety of security measures to maintain the safety of your personal information when you place an order or enter, submit, or access your personal information. We offer the use of a secure server. All supplied sensitive/credit information is transmitted via Secure Socket Layer (SSL) technology and then encrypted into our Payment gateway providers database only to be accessible by those authorized with special access rights to such systems, and are required to?keep the information confidential. After a transaction, your private information (credit cards, social security numbers, financials, etc.) will not be kept on file for more than 60 days.

Do we use cookies?

Yes (Cookies are small files that a site or its service provider transfers to your computers hard drive through your Web browser (if you allow) that enables the sites or service providers systems to recognize your browser and capture and remember certain information We use cookies to help us remember and process the items in your shopping cart, understand and save your preferences for future visits, keep track of advertisements and compile aggregate data about site traffic and site interaction so that we can offer better site experiences and tools in the future. We may contract with third-party service providers to assist us in better understanding our site visitors. These service providers are not permitted to use the information collected on our behalf except to help us conduct and improve our business. If you prefer, you can choose to have your computer warn you each time a cookie is being sent, or you can choose to turn off all cookies via your browser settings. Like most websites, if you turn your cookies off, some of our services may not function properly. However, you can still place orders by contacting customer service. Google Analytics We use Google Analytics on our sites for anonymous reporting of site usage and for advertising on the site. If you would like to opt-out of Google Analytics monitoring your behaviour on our sites please use this link (

Do we disclose any information to outside parties?

We do not sell, trade, or otherwise transfer to outside parties your personally identifiable information. This does not include trusted third parties who assist us in operating our website, conducting our business, or servicing you, so long as those parties agree to keep this information confidential. We may also release your information when we believe release is appropriate to comply with the law, enforce our site policies, or protect ours or others rights, property, or safety. However, non-personally identifiable visitor information may be provided to other parties for marketing, advertising, or other uses.


The minimum information we need to register you is your name, email address and a password. We will ask you more questions for different services, including sales promotions. Unless we say otherwise, you have to answer all the registration questions. We may also ask some other, voluntary questions during registration for certain services (for example, professional networks) so we can gain a clearer understanding of who you are. This also allows us to personalise services for you. To assist us in our marketing, in addition to the data that you provide to us if you register, we may also obtain data from trusted third parties to help us understand what you might be interested in. This ‘profiling’ information is produced from a variety of sources, including publicly available data (such as the electoral roll) or from sources such as surveys and polls where you have given your permission for your data to be shared. You can choose not to have such data shared with the Guardian from these sources by logging into your account and changing the settings in the privacy section. After you have registered, and with your permission, we may send you emails we think may interest you. Newsletters may be personalised based on what you have been reading on At any time you can decide not to receive these emails and will be able to ‘unsubscribe’. Logging in using social networking credentials If you log-in to our sites using a Facebook log-in, you are granting permission to Facebook to share your user details with us. This will include your name, email address, date of birth and location which will then be used to form a Guardian identity. You can also use your picture from Facebook as part of your profile. This will also allow us and Facebook to share your, networks, user ID and any other information you choose to share according to your Facebook account settings. If you remove the Guardian app from your Facebook settings, we will no longer have access to this information. If you log-in to our sites using a Google log-in, you grant permission to Google to share your user details with us. This will include your name, email address, date of birth, sex and location which we will then use to form a Guardian identity. You may use your picture from Google as part of your profile. This also allows us to share your networks, user ID and any other information you choose to share according to your Google account settings. If you remove the Guardian from your Google settings, we will no longer have access to this information. If you log-in to our sites using a twitter log-in, we receive your avatar (the small picture that appears next to your tweets) and twitter username.

Children’s Online Privacy Protection Act Compliance

We are in compliance with the requirements of COPPA (Childrens Online Privacy Protection Act), we do not collect any information from anyone under 13 years of age. Our website, products and services are all directed to people who are at least 13 years old or older.

Updating your personal information

We offer a ‘My details’ page (also known as Dashboard), where you can update your personal information at any time, and change your marketing preferences. You can get to this page from most pages on the site – simply click on the ‘My details’ link at the top of the screen when you are signed in.

Online Privacy Policy Only

This online privacy policy applies only to information collected through our website and not to information collected offline.

Your Consent

By using our site, you consent to our privacy policy.

Changes to our Privacy Policy

If we decide to change our privacy policy, we will post those changes on this page.
Save settings
Cookies settings

BLACKBOILER AI Contract Review Software