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Construction Law/Price Adjustment formula


sir, my question relates to the following.

Formula for Escalation- Labour component
V1 = 0.85 P K1/100 *(L1-L0)/L0

Where, V1 = Amount of price variation,
P    = Cost of work done during the period,  
K1  = Percentage of labour component in the project cost,
L0   = Basic consumer price index,
L1   = Average consumer price index
Formula for material component shall be similar as above with appropriate changes to the material specific.
Q1. In case, a contractor has given a rebate of 14% over the quoted rates for the BOQ items, how the cost of workdone(P) shall be calculated, Qty x quoted rate (or) Qty X quoted rate after rebate of 14%?
Q2. May I request you to publish a model calculation for percentage component(K) for materials?

Dear Sakthivel
I am taking the opportunity to reply your questions,
1.Qty X quoted rate after rebate of 14%, which is the cost of work done during the period.
2. In general the 20%labour component is consider of the project cost in construction industries. It is depending upon the nature of the work.
With due regards

Sanjay Khandelwal  

Construction Law

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Sanjay Khandelwal


I can answer related to the various construction contracts forms related with disputes and claims.Expertise in to evalute the extension of time,cost and profit claims.I can answer regarding the contract management in civil works.


I have the experience of construction industry, as a consultants,executor of construction activities of infrastructure development like road and buildings. I have the experience of various software related to design of highways and quantity evaluation.

I am life member of Indian Road Congress,INDIA I am presently employed with M/s Lion Engineering Consultants,INDIA

My educational qualifications are as below: I am engineering graduate from MITS, INDIA,1987 I have completed my Post graduation from NIT,INDIA,2011

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