The prime contractor submitted a claim for its subcontractor to recover an increase in structural steel prices, asserting “an unpredicatable global steel crisis” invalidated a basic assumption of the subcontract and rendered it impractical.  The Board disagreed, finding that though the increase in steel prices was not the subcontractor’s fault, the 23 percent price increase did not make performance impractical because it represented less than a 5 percent cost overrun in the subcontract price.  Moreover, the fixed-price subcontract assigned the risk of price increases to the subcontractor.  While the subcontractor assumed the steel market would remain within a generally predictable range, this was not a basic or normal assumption about general risk of possible increases for a fixed price contract and there was no evidence the prime contractor nor the government shared the subcontractor’s assumption (Spindler Construction Corp., ASBCA, No 55007).

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