Construction Law/Relevant Rates


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 “?
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

Best Regards

Dear Shadi,

Thank you for your question.

Firstly, let's establish the basics:

a) for establishing a new rate, you need all conditions under either a) or b) to be cumulatively fulfilled.

b)you should have a breakdown of each existing unit rate, or at least of each categories of
works, showing percentages for transport, materials, equipment, workmanship, overheads and profit.

To establish a rate for a new item, is easier, as you compare with similar other items and based on above mentioned breakdown, you can establish the differences and work out the unit rate.

In your case, when you have to change the unit rate for an existing item, you should proceed in a similar way starting from the price breakdown and determine what is different under the conditions set out under a) or b) of Sub-Clause 12.3.

To answer your queries:

1. see above system

2. no, you should stick with the above system, as you have taken responsibility for market fluctuation

3. I am uncertain why do you propose that. Please detail and might develop an answer on that.

4. you have some existing rates and due to cumulative fulfillment of those conditions you have to change them. As shown above, you start from what you have and based on their breakdown, you work out what is different and in which way. For example, for a larger quantity, overhead input may be smaller.

Hope that helps, but if further queries, please come back with additional details.

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