Construction Industry/clause 52.2 fidic 4th edition
QUESTION: hello Mr Wael
happy new year , koul sana wanta tayeb.
The contract is the FIDIC 4th edition 1987 reprinted 1988 and 1992.
The particular condition for clause 52.2 is provide further that no change in the rate or price for any item contained in the contract shall be considered unless such item accounts for an amount more than two (02) percent of the contract price, and the actual quantity of work executed under the item exceeds or falls short of the quantity set out in the bills of approximate quantities by more than 30 percent .
1st question about the above - for the limit of 2 percent is it for the contract amount or for the (contract quantity plus the exceeded quantity) time the contract item price.
2nd question: as I understand, in case of new price , this should be applied to only the extra quantity over than 30% ( example if the exta quantity is 70% , the new price will be applied for the 40% , for the initial contract quantity and the 30% extra we apply the initial contract price) . IS THIS RIGHT?
3rd question : in order to calculate the new unit price for this extra quantity (40%) , could you please give me some reasons which can justify the escalation of the price?.
For me , the new price should be justified by any prejudice due to the escalation of the quantity, and/or to any prejudice in the initial price(omissions, escalation in material prices and labor rates
For examples :
- the fact, the contract is fixed prices , is it possible to use updated prices for materials and new rates for labors and equipments ?
- In case , the contractor has forgotten any article in his initial price break down , is it possible to include it for the estimation of the new rate? As example the price of concrete is including the mixing , but the contractor has forgotten the rate for the concrete mix plant in the initial cost break down .
- In case of omission of any item in the initial cost break down, is it possible to include it for the calculation of the new price.
I would like to inform you that , for the calculation of the new price I need to use the initial cost break down of the contract price , to which I proceed by corrections according to the above reasons.
thank you Mr Wael
ANSWER: Happy New Year Mohammed
the answer to your first question is simple: you have to use the contact price established at the time of talking this issue.
for the second question: if a new price is set, it should be applicable to the additional quantity. the original BOQ quantity shall be fixed with the original price.
for the 3rd question: contractually, the contractor cant come up with a new price for the extra quantity, such price doesn't have to reflect any calculation. but the reason for increased price could be any thing like inflation, Scarcity of the product, higher labor cost ..etc.
for the forth question: yes the Engineer can use the new price of material and or labor to calculate the new price. The Contractor can do the same but he can bring other price justifications for his new introduced price.
for the fifth question: The contractor is not bound by his original price any more for the justified extra quantity.
for the sixth question: I don't know if you are the Engineer or the contractor, but in all cases there is nothing called omission form the initial cost breakdown because such not included detail (concrete mixing) is assumed to be included in the total price.
I hope this clarify all the raised point
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QUESTION: HELLO MR WAEL
THANK YOU SO MUCH FOR THE ANSWERS.
Please, just i need more clarification for the answer to question No.2,
for example the BOQ quantity is 100 m3
the additional quantity is 70 m3.
according to the particular condition of clause 52.2, the payment with the contract price should be applied to 100 m3 or to 130 m3 ?
ANSWER: Dear Mohammed
The new price shall apply for the 70 CM only while the original 100 cm will be calculated based on the original price.
The contract price shall be fixed before doing such addition.
the conditions: 70 cm > 30% of the 100 CM
170 cm price as calculated based on above first para > 02% of contract price
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QUESTION: thanks Mr wael
i m the Engineer.
comming bach to my example, we are in case where the particular condition of clause 52.2 is satisfied ; extra quantity is more than 30% of the contract quantity. and the cost for all the quantity using the contract price is more than 2% the contract amount.
so, which quantity should be payed using contract price : 100 m3 or 130 m3.?
where: 100 m3 is the contract quantity
170 m3 is the total quantity
130 m3 is the quantity over which, a new price could be allowed according to this particular condition :The particular condition for clause 52.2 is provide further that no change in the rate or price for any item contained in the contract shall be considered unless such item accounts for an amount more than two (02) percent of the contract price, and the actual quantity of work executed under the item exceeds or falls short of the quantity set out in the bills of approximate quantities by more than 30 percent .
thanks so much for the help.
if the executed quantity is 170 cum and the original quantity is 100 then the second condition of 30% IS SATISFIED. Actually, such condition is always satisfied since it states exceeds or short of...
It seems your particular conditions was not worded correctly but in general and if you go to the general conditions the modified price shall apply to the extra quantity over the 30%. Ie :
Pay normal price for the 100 Cm and the additional 30 %
pay the modified price for any additional quantity over the 130 Cum.
Please correct my previous answer to read as follows (The new price shall apply for the 40 CUM only while the original 100 + 30 CUM will be calculated based on the original price.