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Construction Law/Price Adjustment-Variation


Dear Florin,

I hope you had a nice vacation. I hope you had a nice vacation. I am going to seek for your expert advice as usual.

What does the following statement relating to the application of price adjustment mean as far as variation and day works are concerned?

“Pn is a price adjustment factor to be applied to the amount of the work carried out in the subject month, determined in accordance with Sub-Clause 42.1, where such variations and day works are not otherwise subject to adjustment”

Does it mean that variations and day works are not subject to adjustment unless valued in accordance with Sub-Clause 42.1?

But to be valued in accordance with Sub-Clause 42.1 is it not required to bring the varied rates to base date rates for instance by dividing the varied rates with price adjustment factor at the time of the Variation?

I have quoted Clause 42 for your understanding.

Clause 42 taken together says:

42 Payment Certificates

42.1 The Contractor shall submit to the Engineer monthly statements of the estimated value of the work executed less the cumulative amount certified previously.

42.2 The Engineer shall check the Contractor’s monthly statement and certify the amount to be paid to the Contractor.

42.3 The value of work executed shall be determined by the Engineer.

42.4 The value of work executed shall comprise the value of:

(a)   The quantities of the items in the Bill of Quantities completed in the case of Ad-measurements Contracts; or

(b)   Completed activities in the Activity Schedule in the case of lump Sum Contracts.

42.5 The value of work executed shall include the valuation of Variations and Compensation Events.

42.6 The Engineer may exclude any items certified in a previous certificate or reduce the proportion of any item previously certified in any certificate in the light of later information.

As usual, I am deeply indebted in advance to hearing your expert advice.


Hello Alemu,

Thank you, yes it was a good vacation, though tiring. Driving 4,300 km and moving from ne place to another was not easy. But definitely interesting, I am not complaining.

Thank you for your new question, let's look at it.

Pn is the value of absolutely all works executed by the Contractor in a certain month.

That Pn however, excludes variations and day works that are adjusted in a different manner, i.e. for which ANOTHER specific adjustment mechanism is applied, or are specifically excluded from adjustment.

Unless you have some specific provisions for such exclusions, there is nothing to be excluded.

Trust that answers your question.

Good luck!

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Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List and of DRBF Chapter for Eastern Europe Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List Member of “” volunteers pool Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States

- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme ( - FIDIC Accredited Adjudicator

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