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    II Annex B General Conditions Appendix 6 Contract Price Adjustment

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    Sandeep Joshi
    This document provides a sample contract price adjustment appendix that could be included in a contract to design, build, and operate a solid waste disposal facility. It outlines a formula to adjust the contract price over time to account for changes in labor and material costs, using indexed values. The formula weights labor, equipment, and material costs and indexes the original costs to current values using source indexes. It establishes conditions for when a price adjustment would apply, such as only for changes over 2% and with a ceiling of a certain percentage change.

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    II Annex B General Conditions Appendix 6 Contract Price Adjustment

    Uploaded by

    Sandeep Joshi
    178 views4 pages
    This document provides a sample contract price adjustment appendix that could be included in a contract to design, build, and operate a solid waste disposal facility. It outlines a formula to adjust the contract price over time to account for changes in labor and material costs, using indexed values. The formula weights labor, equipment, and material costs and indexes the original costs to current values using source indexes. It establishes conditions for when a price adjustment would apply, such as only for changes over 2% and with a ceiling of a certain percentage change.

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    This document provides a sample contract price adjustment appendix that could be included in a contract to design, build, and operate a solid waste disposal facility. It outlines a formula to adjust the contract price over time to account for changes in labor and material costs, using indexed values. The formula weights labor, equipment, and material costs and indexes the original costs to current values using source indexes. It establishes conditions for when a price adjustment would apply, such as only for changes over 2% and with a ceiling of a certain percentage change.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    178 views4 pages

    II Annex B General Conditions Appendix 6 Contract Price Adjustment

    Uploaded by

    Sandeep Joshi
    This document provides a sample contract price adjustment appendix that could be included in a contract to design, build, and operate a solid waste disposal facility. It outlines a formula to adjust the contract price over time to account for changes in labor and material costs, using indexed values. The formula weights labor, equipment, and material costs and indexes the original costs to current values using source indexes. It establishes conditions for when a price adjustment would apply, such as only for changes over 2% and with a ceiling of a certain percentage change.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 4

    Page 0 of 3

    THIS IS A SAMPLE ONLY


    [Note to Users: In the absence of existing local indices, drafters will have to
    rely on documentary evidence of actual changes as an alternative to the
    sample approach in this Appendix. This sample approach presumes the
    existence of reasonable local indices. This Appendix is relevant only if the
    New Operations Period exceeds 18 months.]

    Appendix 6
    Contract Price Adjustment Appendix

    CONTRACT PRICE ADJUSTMENT


    APPENDIX 6 TO THE GENERAL CONDITIONS
    FOR A CONTRACT TO
    DESIGN, BUILD AND OPERATE
    A SOLID WASTE DISPOSAL FACILITY
    [Note: This is just a sample of a price adjustment formula and
    individual project formulae should be developed on a case by case
    basis.]
    Page 1 of 2

    CONTRACT PRICE ADJUSTMENT APPENDIX

    SECTION 1 - CONTRACT PRICE ADJUSTMENT

    1.1 Contract Price Adjustment Formula

    (1) Prices payable to the Operator for the Operations Services in accordance with the
    Contract shall, no sooner than 18 months after the New Operations Starting Date, be subject to adjustment
    during performance of the Operations Services to reflect changes in the cost of labour and material
    components for the Operations Services, in accordance with the following formula:

    L1 M1
    P1  P0  ( a  b c )  P0
    L0 M0

    in which:
    P1 = adjustment amount payable to the Operator for Operations Services;

    P0 = Contract price (base price);

    a = fixed element representing profit and overhead in Contract price (a = %) for


    Operations Services;

    b = estimated percent of labour component in Contract price (b = %) for Operations


    Services;

    c = estimated percent of Operator’s Equipment (Operations) component in Contract price (c


    = %);

    L0, L1 = labour indexes applicable to the appropriate industry in the country of origin
    on the base date and the date for adjustment, respectively; and

    M0, M1 = material indexes for the major raw materials in the country of origin on the base date
    and the date for adjustment, respectively.

    The sum of the three coefficients a, b and c shall be one (1) in every application of the formula.

    (2) The Bidder shall indicate the source of labour and materials indexes and the base date
    indexes in its Bid.

    Item Source of Indexes Used Base Date Indexes

    (3) The base date shall be the date 30 days prior to the Bid closing date.

    (4) The following conditions shall apply:

    (a) Price adjustment will be applied only if the resulting increase or decrease is more
    than 2% of the Contract price for Operations Services;
    Page 2 of 2

    (b) No price increase will be allowed for periods of delay in the performance of the
    Operations Services for which the Operator is responsible. The Owner will,
    however, be entitled to any price decrease occurring during such periods of
    delay;

    (c) The total adjustment (plus or minus) shall be subject to a ceiling amount of
    percent (__%) of the Contract price for Operations Services;

    (d) If the currency in which the Contract price for Operations Services, P0, is
    expressed is different from the currency of the country of origin of the labour or
    materials indexes, a correction factor will be applied to avoid incorrect
    adjustments of the Contract price for Operations Services. The correction factor
    shall correspond to the ratio of exchange rates between the two currencies on the
    base date and the date for adjustment as defined above; and

    (e) No price adjustment shall be payable on the portion of the Contract price for
    Operations Services paid to the Operator as an advance payment.

    TOR_2024-#11409780-v3-Contract_Price_Adjustment_Appendix.DOC

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