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Construction Law/Price Adjustment Fixed Indices


Assalam o Alaikum

Dear Sir

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%)?


Abdul Waheed

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

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Liaqat Hayat


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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