Can I get new unit price in the re-measure contract?
Sun, 2012-01-15 09:30
Hi All,
Can I get new unit price in the re-measure contract in case of drastic increase in the item quantity?
Regards,
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Mon, 2012-03-26 12:15
#1
Hi Bernadette
There are provisions in most contracts for price revisions in case of variation orders but increased quantitiees are not automatically variations.
Other terms state that increase or decrease in quantities within a percentage band do not warrant unit price changes.
The change in a unit price is necessary to adjust the recovery of fixed cost elements in a volume and time related price.
For instance the unit price of insitu concrete may well include the fixed cost of setting up a batching plant and deploying haul trucks.
If there is less concrete than initially measured then the fixed costs will not be fully recovered and if there is more then the cost will be over recovered - hence the need for an adjustment.
Best regards
Mike Testro
Sun, 2012-03-25 15:25
#2
Hi Mike,
Isnt it that the premise of a re-measurement contract is that "contract" quantities are deemed provisional except for the unit rates which are fixed? Therefore, in Ayman's case, he can get a new unit price for a (new) work item not identified in the contract.
Any "drastic" increase or decrease in quantities given the fixed unit rate could be a risk either by the owner or contractor.
Im not familiar with the different contract provisions of a re-measurement contract wherein unit rates could be changed, can you give examples?
Apologies for the lateness of my comment/s. Newbie here
Cheers,
Bernadette
Sun, 2012-01-15 11:08
#3
Hi Ayman
Probably yes - depending on the terms of the contract - but in case of a "drastic increase" in quantities then be prepared for a reduction in unit prices.
Best regards
Mike Testro
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