Construction Law/12.3 clause

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QUESTION: Question:   
Dir. Sir , I am contacting you to inquire about an issue related to derived new  price from  Relevant rates  as clause 12.3 “Evaluation” in Red book of Fidic/1999 , in this case :
The changes in the item Check the following :
-(a)    the measured quantity of the item is changed by more than 10% from the quantity of this item in the Bill of Quantities or other Schedule,
-(b)   this change in quantity multiplied by such specified rate for this item exceeds 0.01% of the Accepted Contract Amount,
-(c)   this change in quantity directly changes the Cost per unit quantity of this item by more than 1%,

The question is “ if the contractor unit price of this item is much higher than which is considered,
In this case how can i make a new price of this item which the quantity of Bill of Quantities is less than measured quantity of this item???
The second question Can I make a new price of this item according to the marketing price when the price of the contractor is over much than the considered ?
The third question can I considered the new price of this item is the same price which menitioned in the third condition of  this claue 12.3  “Cqm “?

Best Regards

ANSWER: Dear Shadi,

I hope that you have resolved your earlier problems.  I am not sure that I understand your questions.  Remember that any change must satisfy all four conditions of clause 12.3 a (i) - (iv).  The word, at the end of sub-clause 12.3.a.(iii), is 'and' not 'or'.  

All new rates have to be calculated in the logic of the Contract, using the contract rates for similar items where possible.  Current markets rates are irrelevant.  Only market rates at the base date, usually 28 days before the deadline for submission, can be used for new items.  Then the new rates are modified in accordance with any fluctuation clauses or changes in legislation clauses. Remember, if the Contract rate appears too high, then there is another rate that is too low.  The risk of unequal pricing is the Contractor's.



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QUESTION: thanks about above , but i want to ask if the market rates are irrelevant , and if i must use only the contract rates , and the change in the item is only increase or decrease the quantity of the item , How can i make a new price if i the Relevant rates which must i use it is the same item which mentioned above .
note all of the conditions 12.3a (i)-(iv) -(iii)are satisfied
if you can give me one example to explain this issue .
and what is the different between clause 12.3evaluation and clause 13 Variation order
thanks for you
Best Regards

ANSWER: Dear Shadi,

I don't do private questions on this public free service, when the answers could be of use to many people and no reason is given.  Please read the instruction on my page.  You can resubmit the question as a public question if you wish or give a reason why it should remain public.

---------- FOLLOW-UP ----------

QUESTION: Dir Sir
i want my question to be free service but may be something error happened
, i want to know how can i make a new rate of the item if i can not change the cost of the material because the market rates are irrelevant ,,,,
can i change the ratio of the profit of the item ?
best regards

Answer
Dear Shadi,

Your question is so general that it is difficult to give specific advice.  I have no idea why the rate should be changed.  If there is an increase in the quantities, then there could be the economies of scale, or reduction in overhead recovery.  If the quantity is reduced, then there could be a case for loss of profit and a need for an increase in overhead recovery.  Perhaps you would find it useful to do a search on google or to look at one of the sites on construction law, such as www.atkinson-law.com

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Peter M. Elliott

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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 www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

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

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B Sc(Hons) in Civil Engineering

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