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Construction Law/Increase & Decrease as Per PEC

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Question
Dear Sir

I have the followings concerns on PEC formula and need your kind attention.

1- The sum of all the weightages (Fixed + adjustable) should be equal to 1, if in a particular month there is no work of concrete or say steel then we will take their coefficients in formula?

2- When we calculate the workdone amount for a particular month, then should we calculate it as per consumption? like cement in bags, steel in tonnage etc.if we do then some components will not be considered in formula.

regards

Answer
Dear Muqaddas Ali Bangash Sahib,

Thank you for your question and like to respond as follows:
1.   Yes, the sum of all weightages (fixed and adjustable) should be equal to 1 as on 28 days prior to bid submission date. Afterwards, the factor Pn becomes more than 1 depending on price hike of the specified materials. The formula has basically two variables namely; indices published by statistical bureau / ex-factory prices of certain materials and secondly, it is weightages of specified material worked out as cost of the same 28 days prior to bid submission date / current date as applicable. Please note that formula is independent of quantity of these materials and hence should not have any impact on it. The PEC has, however, issued one amendment due to which the materials not issued in a particular month, the indices ratio shall be considered one but professionals do have reservations on this.
2.   As explained above, the formula do not cater for material quantum but weightages and indices only and their variation alone is to be considered.

Regards,
Liaqat Hayat  

Construction Law

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Liaqat Hayat

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I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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