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Construction Law/FIDIC GCC Sub-Clause 12.3 (a) (iii)

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Question
Dear Sir,
Kindly advise on the proper interpretation and calculation of the value (1%) mentioned in the subject Sub-Clause 12.3 (a) (iii)
"this change in quantity directly changes the Cost per unit quantity of this item by more than 1%".
For example:

As Per BoQ:

Item      Quantity   Unit    Rate      Amount
Concrete     100         CM     20,000      2,000,000

As Per Measured Quantity:

Item        Quantity   Unit    Rate      Amount
Concrete   200   CM   20,000      4,000,000

Kindly, guide, how to calculate this one percent (1%)for the above mentioned, BoQ Vs Measured Quantity.

Regards

Answer
Dear Shahbaz,

You must calculate the cost of producing the concrete due to the new quantity.  If it was produced manually in the first instance and now through a batch plant, then the cost would vary.  If the variation is more than 1%, then this clause applies.  If a batch plant was used for both quantities, then there could be a reduction in overhead recovery.  For example, it might cost 5 per cm for the plant set up to produce 100 cm, but only 2.5 per cm for the plant set up to produce 200 cm.  Thus the cost of production has varied by (5-2.5=2.5), which is more than 1% of the original rate.  

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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

Education/Credentials
B Sc(Hons) in Civil Engineering

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