Construction Law/New Rate
My question is related to sub-clause 12.3 of Fidic MDB version 2010.
Please guide me that what does the term 'Measured Quantity' in sub-
Paragraph 'a(i)' means? Moreover, in what conditions does sub-paragraph 'a'
apply for determination of new rate for an item of work?
Thank you for this question.
In its standard form the MDB Harmonised form of contract is a "measure and value" contract as set out in sub-clause 12.1; it requires every item of work to be measured and calculated and evaluated using pre-agreed rates and prices. The term "measured quantity' therefore means the actual (final) amount of work performed against the item for which the need for a new rate is being considered.
When considering the need for new rates, the form of contract lays out two set of criteria. A new rate or price shall be appropriate if all of 12.3(a) OR 12.3(b) apply. Sub-cluase 12.3(b) is relatively;y straightforward, but 12.3(a) often causes problems for users.
Sub-clause 12.3(a) only becomes the basis for determining that a new rate or price is needed if ALL of the sub-clause 12.3(a)-(d) inclusive apply.
By way of example, the concrete in foundations may have increased so that you think a new price is warranted. The accepted contract price was $10,000,000. Sub-cluase 12.2(b) would not apply because there are existing rates and prices for the originally anticipated work scope for foundations. A new rate would only be relevant under 12.2(a) if:
(i) The amount of concrete in the foundations was more than 125% of the original volume. (For example it may have increased from 1,000m3 to 1,300m3 - a 30% increase).
(ii) The increased in quantity (300m3) when multiplied by the item rate > (Accepted Contract Amount) x 0.25% (i.e. that is more than $10 million x 0.25% or more than $25,000)
(iii) The increase (300m3) causes the unit rate to increase by more than 1%. (For example it mat have to move from $150.00/m3 to more than $157.50/m3
(iv) The original rate was not what is called a fixed rate item. The wording of FIDIC here is not certain but, usually, a fixed rate is one that does not vary as a result of inflationary cost increases for example.
I hope that this assists you.
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