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# Construction Law/clarification of condition of contract

Question
Multilateral Development Bank Harmonized Edition June 2010, Clause 12.3 allows the Engineer to proceed to determine the Contract Price by evaluating each item of work. It says a new rate or price shall be agreed or determined by the Engineer with the conditions of ;
(i) the measured quantity of the item is changed by more than 25% from the original quantity,
(ii) this change in quantity multiplied by such specified rate for this item exceeds 0.25% of the Accepted Contract Amount,
(iii) this change in quantity directly changes the Cost per unit quantity of this item by more than 1%, and
(iv) this item is not specified in the Contract as a "fixed rate item".

Present Case

item work  BOQ Qnt  Rate Amount    Executed Qnt   Amount      %increase
Pipe work    4307   500  2,153,500   21960       10,980,000      510%

Total Contract Amount 1,351,312,222.32

In above condition (i) is satisfy (i.e. increased  more tah 25% qnt than BOQ quantity) and Condition (ii) is also satisfy (i.e. increase by more than 0.25% of Accepted Contract Amount).

But, I can not understand condition clause (iii) of 12.3.
Will get contractor get new rate for this item
Will you clarify detail with example

Thank you and regards
Chandika

Dear Chandika

Yes Contractor is entitled for revised rate.

BOQ amount = 2,153,500
Actual amount = 10,980,000
%increase in amount = 2,153,500/10,980,000 = 19.6%

Based on this increase in unit price of this item should also be increase by 19.6%, although the increase in quantity is 510%.

the new unit rate = 500 + (500 x19.6%)= 598
The new amount = 598 x 21,960 = 13,132,080

I am not a quantum expert but this is my personnel opinion.

Vineet

#### Vineet Shrivastava

##### Expertise

I can answer any question on 1. Project Planning 2. Delay Analysis - Extension of Time 3. Project Management 4. Contract Management 5. Construction Methodology I can't Answer any question 1. Cost related issues

##### Experience

I have 22 year experience in construction industries at Singapore, India and Australia. I worked as Planning Manager and delay analyst for contractor. I am currently working with claim consultancy as Associate Director.

Organizations
Navigant Consulting APAC Pte Ltd E C Harris Sinagpore Pte Ltd McConnell Dowell SEA Pte Ltd Kajima Oversea Asia Pte Ltd Taisei Corporation

Education/Credentials
B.E (Civil), PGDMA(PM), Graduate Diploma (Const. Management), MSc (Intl. Const. Management),LLM In Construction Law (Arbitration & Adjudication), FSIArb, MCIArb, MIES, MSIB MIIAM, MMIArb