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Construction Law/Sub Clause12.3 (iii)

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Question
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%).

Regards,

Answer
Dear Widyapraja,

Thank you for this question.

YOu have not set out the reasons why the rate increase will be so great and I will not speculate. In answer to your query regarding the condition set out in sub-clause 12.3(a)(iii) -  that the change in quantity directly changes the Cost per unit quantity of the item by more than 1% - I note as follows.

Your original rate was $500.
1% of that original rate is, therefore, $5.

For a new rate to be appropriate under sub-clause 12.3(a), all of conditions (i)-(iv) must apply. Hence your new a reg must be more that $5 different from the old rate; that is it must be less than $495/item or more than $505/item. As you are proposing a new rate of $900 this criterion is satisfied.



I hope that this assists you.

Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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