Variation Clause

Hi Sankar

I think you are confusing Contract Price and Value.

The Contract Price would be the unit rate for a particular piece of work.

If the volume has increased by more than 25% - say from 100% to 130% - then the revised rate will be applicable to the extra 5%.

An increase in volume will usually result in a lower unit rate once the fixed costs have been filtered out and re-applied..

Best regards

Mike Testro

Dear Mike ,

Ours is an item rate Contract .In Contrat  we have a loosing BOQ item for water proofing . Now client want to change the specification of the item (like 1:4 plaster instead of 1:3 ,Extra  5 mm thickness, also they recommend  a product from different manufacturer) .Can we revise the rate for the entire BOQ item or we are  only eligible for  extra items like 5mm thickness .And the main problem is estimated quantity is coming much more than actual BOQ quantity.

Thansk & Regards

SV

Hi Sankar

That is a straight forward variation but because the new spec is similar to the old one the correct procedure should be to adjust the original rate - even if it is already low.

You may get away with a complete reprice but the employer's QS would be suspicious if the new rate for the weaker mix came out more than the old one.

Best regards

Mike Testro

Mike,

A project was awarded a year or more after bidding time and the quantities in the BOQ are less than the quantities in the design drawings. Currently during execution, Prices of materials were slightly increased.

When is it feasible to apply for price escalation?

Regards,

Raymund

Hi Raymund

When the contract was signed the rates and prices were fixed.

If no objection was raised before signature then no claim can be raised afterwards.

If the contract allows then repricing for smaller quantities - not known at the time of signature - may be allowed.

Best regards

Mike Testro

Mike,

Thanks for the reply. I agree with it.

Regards,

Hi Mike,

This item, cost was more than sales price .Even if the new rate for the weaker mix came out more than the old one.we have no problem because we are geeting fixed mark up on the new rate .How to win this battle against client in this scenario

Thanks & regards

SV

Hi Sankar

A bargain was made when the rate for the waterproof rendering was set into the contract.

It is not fair that the employer should lose the benefit of the bargain that he made originally.

It is not a matter of winning - it is a matter of equity.

Best regards

Mike Testro