What is the price variation ?
A price which is in excess of the basic price of the material or if the basic price of that material or if the basic price of the material is reduced the contract sum shall accordingly be varied, provided always that any increase so payable in not in the opinion of Client Engineer or Engineer Incharge ,(whose decision shall be final and conclusive),attributable to delay in the execution of the contract with in the Control of the contractor.
Price variation is one of the most important clause of the Civil Contract as the civil contract have a time period of 2 months to Years, so these type of clause help the contractor to recover the losses due to increase in the base rate of the contract.
Documents Required for the Price variation in Civil works contracts
The contractor shall for purpose of this condition keep such books of account & other documents as are necessary to show the amount of
any, increased claimed or any reduction available and shall allow inspection of the same by any duly authorized representative of Client and further shall at the request of the Engineer furnish for verification such other information as the Engineer may require.
The Contractor shall within a reasonable time of his becoming aware of any alteration in the prices of any materials, give notice thereof in writing to the EIC starting that the same is given percent to this condition together with all information relating there to which he may be in a position to supply.
Base Month of Price variation in Civil works contracts
The base month for “Price Variation Clause” shall be taken as month of opening of tender including extensions, if any, unless otherwise stated elsewhere
Price variation in Civil works contracts
Price variation in Civil works contracts is generally provided for the Two items Cement and Steel.
The Price variation for Cement & Reinforcement Steel shall be worked out as detailed below.
This adjustment shall be worked out on monthly basis & shall be paid/recovered along with running account bills.
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Price variation for Cement in Civil Contracts-
The price adjustment amount for Cement shall be worked out on the basis of following formula:
VC = PC X QC X ( CI –CIo) / CIo
Where,
VC : Variation in cement cost i.e increase or decrease in the amount in rupees to be paid or recovered.
PC: Base price of cement (in rupees per bag of 50 Kg) for price adjustment purpose only
For Example in the month of February 2022 is Rs. 270/- (Rupees Two hundred Seventy only).( Rate should be basic without GST )
QC: Quantity of cement used (in bags of 50 Kg) during the month under consideration. The
quantity of cement consumed shall be worked out on the basis of theoretical consumption as per norms. Cement consumed more than the theoretical consumption norms shall not be considered for price adjustment. This shall be adjusted in the final bill for minimum of actual quantity of cement consumed against theoretical cement consumption.
CIo: Index number of Wholesale Prices in India- by Groups and Sub-Groups (Averages) applicable for Grey Cement (weightage – 1.26347) declared by office of the economic advisor, GOI for the month valid on the last stipulated date of receipt of bids including
extensions, if any.
CI: Index number of Wholesale Prices in India- by Groups and Sub-Groups (Averages) applicable for Grey Cement (weightage – 1.26347) declared by office of the economic advisor, GOI for the month price adjustment is under consideration.
Price variation for Reinforcement Steel
The price adjustment amount for Reinforcement Steel shall be worked out on the basis of following formula:
VS = PS X QS X (SI –SIo) / SIo
Where,
VS : Variation in reinforcement steel cost i.e increase or decrease in the amount in rupees to be paid or recovered.
PS: Base price of reinforcement steel (in rupees per Kg) For The Feburary Month is Rs. 75/- (Rupees Seventy five Only).( Rates without GST)
QS: Quantity of reinforcement steel used in Kg during the month under consideration. The quantity of reinforcement steel consumed shall be worked out on the basis of linear measurements & standard unit weight coefficients. The reinforcement steel consumed more
than the theoretical consumption norms shall not be considered for price adjustment.
SIo: Index number of Wholesale Prices in India- by Groups and Sub-Groups (Averages) applicable for Rebar (weightage – 0.73617) declared by office of the economic advisor, GOI
for the month valid on the last stipulated date of receipt of bids including extensions, if any.
SI: Index number of Wholesale Prices in India- by Groups and Sub-Groups (Averages)applicable for Rebar (weightage – 0.73617) declared by office of the economic advisor, GOI
for the month price adjustment is under consideration.
Price variation for Cement & Reinforcement Steel Indices-
Price variation for Cement Indices
Price variation for Reinforcement Steel Indices
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