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Construction Law/Works executed less by 15% of ACP


Dear Sir. My questionis related to the adjsutment of amount when the executed works are less by 25% of the accepted contract price (ACP), whereas the contractlimit is 15%. How is to adjust this reduced amount for the Contractor's compensation. Does it mean to calculate the 10 of the ACP and then only to find the addtional amount according to certain %ages of the indirect cost, overheads and profit (these %ages given in the contarct price breakdown)of this 10% of ACP and then this amount is added to the Contract price.
Suppose ACP for the works = 2500 USD
Amount of works exected on completion= 2000 USD (less by 500USD)
suppose the contract breakdown shows
insurance and guarantes = 4%  (indirect cost)
overheads= 3%
profit = 2%
then we calculate the amount for compensation this way= (4+3+2)% *500 = 45 USD.
and this amount of 45 USD is to paid addtionally to the contract and added to the ACP. Am I correct.
And will the same procedure be adopted for the works if escuted in acess of the ACP by a %age more than the contrac limit of 15%?. Also please advise, if no such %ages are given in the price break down for contractor's other indirect costs, overheads, profit, then what shall be the parameters to be considered for such caluclations of the amount of compensation to the Contractor. Please advise. Regards.

Dear Muhammad
I am trying and taking the opportunity to answer your question. Before answering to the question; Let me know under which contract form you are working or refered? In general cost of contract doesn,t give the any liberty to the contractor to claim for the work completed less than the amount of ACP. On the other part contract has give the liberty to the contractor for new rates if the quanties of the scheduled items consumed more or less than the given in the schedule with some limitations.I awaiting your response in this regard for further dialogues with you in this regard.
I hope your co-operation will be highly appreciated.  

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Sanjay Khandelwal


I can answer related to the various construction contracts forms related with disputes and claims.Expertise in to evalute the extension of time,cost and profit claims.I can answer regarding the contract management in civil works.


I have the experience of construction industry, as a consultants,executor of construction activities of infrastructure development like road and buildings. I have the experience of various software related to design of highways and quantity evaluation.

I am life member of Indian Road Congress,INDIA I am presently employed with M/s Lion Engineering Consultants,INDIA

My educational qualifications are as below: I am engineering graduate from MITS, INDIA,1987 I have completed my Post graduation from NIT,INDIA,2011

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