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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.  

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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.


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