You are here:

Construction Law/New rate for the item because quantity is exceeding more than 25%


Dear Peter,

I am working for construction company in middle east. we are following FIDIC Red Book 1999.

Engineer issued Site work instruction for additional stone wall cladding. Our Contract is Lumpsum Contract. as per BOQ

stone cladding qty is 70 m2 x rate is 40.5 = total amount is 2835.

as per new site work instruction

Stone cladding qty is 1221 m2. we submitted our cost calculation using contract unit price which is 40.5. Engineer replied to saying that the unit price to be revised since the quantity of item is exceeding more than 25% and from my verbal talk with engineer S QS he informed me that the price will decrease since the quantity increased. Can you please guide me how to find the new unit price.



Dear Balakrishnan,

Clause 12.3 has four conditions which must be fulfilled before there is a change in rates.  I presume that 25% is mentioned in the Special conditions of Contract.  

If the rate is to be changed, then several factors are to be considered.  Is the Contract Price more than 15% greater than the Accepted Contract Sum?  If so, there could be a reduction in the rate due to increased overhead recovery, but any changes would have to wait until the final Contract Price is calculated.  Has the method of working changed? If so, there could be a reduction in rate due to the economies of scale, but I consider it unlikely in this instance and at this stage of the Contract.  

I would ask the S QS on what contractual grounds he considers that the rate should be reduced and go from there.  If he declines to answer, then stick to your rates as submitted and claim for any difference if imposes a reduction.  

Construction Law

All Answers

Answers by Expert:

Ask Experts


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 . . .
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')

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

B Sc(Hons) in Civil Engineering

©2016 All rights reserved.