Construction Law/Price Adjustment Fixed Indices
Assalam o Alaikum
Can the Fixed Non Adjustment Index for Price Adjustment of A Mechanical Project and Civil Project be same. If a Mechanical Project involves procurement of Mechanical Plant as major cost item and its rate has been taken from the supplier's Quotation which will remain valid during the project duration. The Fixed Non-Adjustable index shouldn't be more ? May be around 0.8 (80%)?
Dear Waheed Sahib,
Thanks for another question.
In my view you have raised a valid point but it all relate to the provisons already agreed and provided for in the contract.I have seen a contract in Africa showing such an index for construction machinery rate variation of upto 15% catered for this.In that case , I agree,the fixed non-adjustible index has to be adjusted accordingly in that case specially in projects involving considerable machinary inputs. As it is a PEC doc.,you may like to write them for review of this point to be included in next review of their standard procurement documents