Construction Law/Sub-Clause 12.3


Dear Sir,

I would like to ask you in connection with sub-clause 12.3 (iii). At the moment i have change order with additional quantity for relocation LV poles (originally 99 poles to be 154 poles) and i intend to propose a new rate since contract rate is no longer sufficient to be applied (original rate: $500/unit, new rate: $900/unit).
The condition is comply with criteria 12.3 (i), (ii), (iv), but i need clarity particularly for criteria 12.3 (iii) (change in quantity directly changes the cost per unit quantity of this item by more than 1%).


Dear widyapraja,

Clause 12.3 (iii) generally applies to the economies of scale.  With increased quantities can a different technology be applied to reduce the rate.  For example machine digging a hole rather than hand digging it.  

This clause does not apply just because the cost of raw materials or supplies has increased.  You will have to provide more justification for the new rate, beyond an increase in the cost of LV poles or that you under-priced the rate when you made your bid or base your claim on a different clause.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
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Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

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