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Construction Law/PINK BOOK FIDIC 2010

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Question
AOA  SIR HOW R U
we are dealing Highway project will you please explain with example for clause 12.3 (a) (iii)This change in quantity directly changes the cost per unit quantity of this item by more than 1%

Answer
Dear Imran,
Thank you for your question. I like to respond as follows.
The part (i) and (ii) of sub-clause 12.3 are quite simple and need no detailed elaboration. It is only item (iii) which needs to be explain i.e. when the change in quantity directly changes the cost per unit quantity of this item by more than 01 percent. Let us take an example in which 1000cm of concrete has increased to 1500cm. The contract cost of 1000cm is 500,000 rupees and that means unit rate is 500 rupees per cm. Now while executing the revised quantity of 1500cm at site it comes to Rs.510,000 and hence unit rate comes to about 340 rupees per unit rate. It is possible that unit rate may also vary partly due to Contractor's adoption of revised method of transportation to a cheaper alternative available now and was not available at tender stage. Such reduction in cost has been possible in some cases with the opening of a new route in the intervening period after tendering and Contractor may be using this alternative with less cost. It is only an example to elaborate. Also unit cost can be impacted as a result of more quantity of excavation involved now. It means unit cost has varied by more than 01 percent and hence all three conditions are fulfilled to revise the rate. This criteria is specified in order to avoid adjusting a rate by less than 01 percent. Let me clarify that the contract rate per unit is normally based on BOQ rates while the revised quantity on near actual expenses estimated to be incurred at the time of execution of the revised quantity.
This is my opinion and am open to further discussion if you have any point.

Regards,
Liaqat Hayat

Construction Law

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Liaqat Hayat

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I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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