Kuala lumpur: The Institution of Engineers, Malaysia (IEM) has released its Engineering Impact Survey Report to address the impact of the global supply crisis triggered by recent geopolitical developments in the Middle East. It has also introduced Practice Note 2026-01 to provide immediate contractual guidance for the engineering profession. According to BERNAMA News Agency, IEM president Yau Chau Fong stated that the proactive dual action approach was initiated following a National Economic Action Council (MTEN) briefing. The findings of the report indicate significant challenges in the Malaysian engineering landscape, with 90.51 per cent of respondents acknowledging an 85 per cent increase in diesel prices. Additionally, 81.15 per cent of those surveyed experienced a 12.59 per cent rise in key materials such as steel, concrete, and bitumen. The report highlights that 88.89 per cent of respondents are facing budget overruns, while 74.90 per cent are encountering notable project delays. Further, 83.90 per c ent of contractors, particularly small and medium enterprises (SMEs), are experiencing severe financial stress, with many on the brink of insolvency. Yau emphasized the critical issue of potential quality compromises, with 37.45 per cent of respondents noting increased financial pressures leading to risks of "cutting corners," potentially jeopardizing public safety and asset sustainability. The survey, which forms the basis of the report, involved 272 seasoned professionals, more than half of whom possess over 20 years of technical expertise. Meanwhile, the Practice Note 2026-01, titled "Managing Material Price Fluctuation in Construction Contracts Arising from Global Supply Disruptions," provides clarity on the administration of projects under IEM's conditions of contract (IEM COC). It emphasizes that the contract sum is fixed unless an option module B, a 'price fluctuation clause,' is agreed upon, allowing contractors to claim for price increases in cement, steel reinforcement, bitumen, and diesel. The p ractice note urges engineers to facilitate 'amiable solutions' and consider supplementary agreements to maintain project viability amidst market shocks. Yau stated that while the issuance of Practice Note 2026-01 offers guidance, professional advice alone is not sufficient. Yau called for urgent government intervention to stabilize material supplies and implement mandatory variation of price (VOP) mechanisms to avert a collapse of the national project delivery pipeline. IEM advocates for alignment among individual engineers, the institution, and the government. Key recommendations include targeted subsidies, immediate diesel and fuel rebates for the engineering and logistics sectors, standardizing VOP and extension of time mechanisms across projects, and incorporating bidirectional price fluctuation clauses in new contracts to ensure fairness for both employers and contractors.