Fluctuations in construction contracts - Revision history

Designing Buildings at 05:47, 30 July 2024

2024-07-30T05:47:19Z

← Older revision		Revision as of 05:47, 30 July 2024
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	* Contract sum.		* Contract sum.
	* Escalation.		* Escalation.
		+	* Escalation clause.
	* Inflation.		* Inflation.
	* Procurement route.		* Procurement route.
	* Tender.		* Tender.
	* Tender inflation.		* Tender inflation.
−
−	~~= External references =~~
−
−	* Guide to DB05, Sarah Lupton, p101.
−	* Architect's Legal Handbook, Ninth edition, Anthony Speaight and Gregory Stone, Architectural Press 2010, Page 200.
−	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.
−	* RICS professional standards and guidance, UK Fluctuations 1st edition, August 2016.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 08:46, 11 October 2022

2022-10-11T08:46:45Z

← Older revision		Revision as of 08:46, 11 October 2022
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	Generally the contractor is not entitled to fluctuations after the completion date.		Generally the contractor is not entitled to fluctuations after the completion date.

−	The amount of fluctuations may be calculated from nationally published price indices ~~(for example Joint Contracts Tribunal (JCT) bulletins or public records)~~ rather than calculating actual cost increases which could be very time consuming.	+	The amount of fluctuations may be calculated from nationally published price indices rather than calculating actual cost increases which could be very time consuming. Provisions vary from contract to contract, and even within contracts there may be several options for fluctuations.

−	Payment calculations ~~are then~~ based on a project programme for activity and a payment chart against the programme resulting in a cash flow projection. Quarterly percentage assessments of inflation are then added to the projected figures allowing for price fluctuation.	+	JCT for example has three options:
		+
		+	* Option A: contribution, levy and tax fluctuations.
		+	* Option B: labour and materials cost and tax fluctuations.
		+	* Option C: formula adjustment.
		+
		+	Option C is based on the Price Adjustment Formula Indices (PAFI), and are maintained by BCIS, and the specification of a base month against which changes are to be calculated.
		+
		+	Payment calculations might for exampled be based on a project programme for activity and a payment chart against the programme resulting in a cash flow projection. Quarterly percentage assessments of inflation are then added to the projected figures allowing for price fluctuation.

	If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.		If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.
		+
		+	See also: Inflation in the construction industry.

	= Related articles on Designing Buildings =		= Related articles on Designing Buildings =
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	* Architect's Legal Handbook, Ninth edition, Anthony Speaight and Gregory Stone, Architectural Press 2010, Page 200.		* Architect's Legal Handbook, Ninth edition, Anthony Speaight and Gregory Stone, Architectural Press 2010, Page 200.
	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.		* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.
		+	* RICS professional standards and guidance, UK Fluctuations 1st edition, August 2016.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 10:54, 28 December 2021

2021-12-28T10:54:53Z

← Older revision		Revision as of 10:54, 28 December 2021
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	If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.		If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Base date.		* Base date.
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	= External references =		= External references =

−	* Guide to DB05, Sarah Lupton, p101~~. Available from [http://www.ribabookshops.com/item/guide-to-db05/61861/ RIBA bookshop]~~.	+	* Guide to DB05, Sarah Lupton, p101.
−	* Architect's Legal Handbook, Ninth edition, Anthony Speaight and Gregory Stone, Architectural Press 2010, Page 200~~. Available from [http://www.ribabookshops.com/item/architects-legal-handbook-9th-edition/68993/ RIBA bookshop]~~.	+	* Architect's Legal Handbook, Ninth edition, Anthony Speaight and Gregory Stone, Architectural Press 2010, Page 200.
	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.		* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Editor at 10:29, 9 July 2021

2021-07-09T10:29:00Z

← Older revision		Revision as of 10:29, 9 July 2021
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	* Base date.		* Base date.
	* Cash flow estimate.		* Cash flow estimate.
		+	* CLC urges inclusion of fluctuations provisions in contracts.
	* Construction inflation.		* Construction inflation.
	* Contract conditions.		* Contract conditions.

Designing Buildings: Reverted edits by 82.25.62.139 (talk) to last revision by Designing Buildings

2020-11-03T06:40:40Z

Reverted edits by 82.25.62.139 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 06:40, 3 November 2020
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−	Fluctuations ~~will help~~ provisions in construction contracts provide a mechanism for dealing with the effects of inflation, which on large projects lasting several years can be very significant. On smaller projects, the contractor will be expected to take inflation into account when calculating their price (a firm price). On larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).	+	Fluctuations provisions in construction contracts provide a mechanism for dealing with the effects of inflation, which on large projects lasting several years can be very significant. On smaller projects, the contractor will be expected to take inflation into account when calculating their price (a firm price). On larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).

	Fluctuation clauses in contracts may allow for:		Fluctuation clauses in contracts may allow for:
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	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.		* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.

−	~~[[Category:Articles_needing_more_work]]~~ [[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

82.25.62.139 at 02:49, 3 November 2020

2020-11-03T02:49:38Z

← Older revision		Revision as of 02:49, 3 November 2020
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−	Fluctuations provisions in construction contracts provide a mechanism for dealing with the effects of inflation, which on large projects lasting several years can be very significant. On smaller projects, the contractor will be expected to take inflation into account when calculating their price (a firm price). On larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).	+	Fluctuations will help provisions in construction contracts provide a mechanism for dealing with the effects of inflation, which on large projects lasting several years can be very significant. On smaller projects, the contractor will be expected to take inflation into account when calculating their price (a firm price). On larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).

	Fluctuation clauses in contracts may allow for:		Fluctuation clauses in contracts may allow for:
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	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.		* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.

−	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:Articles_needing_more_work]] [[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 10:25, 2 September 2020

2020-09-02T10:25:26Z

← Older revision		Revision as of 10:25, 2 September 2020
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	* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.		* Estimating and Tendering for Construction Work, Martin Brook, Third Edition, Elsevier Butterworth Heinemann, 2004, P185. Available from RICS books.

−	[[Category:~~Articles_needing_more_work~~]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 13:30, 5 July 2019

2019-07-05T13:30:13Z

← Older revision		Revision as of 13:30, 5 July 2019
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	If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.		If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Base date.		* Base date.
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	* Tender inflation.		* Tender inflation.

−	=== External references ===	+	= External references =

	* Guide to DB05, Sarah Lupton, p101. Available from [http://www.ribabookshops.com/item/guide-to-db05/61861/ RIBA bookshop].		* Guide to DB05, Sarah Lupton, p101. Available from [http://www.ribabookshops.com/item/guide-to-db05/61861/ RIBA bookshop].

Designing Buildings at 10:01, 30 March 2018

2018-03-30T10:01:58Z

← Older revision		Revision as of 10:01, 30 March 2018
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	* Base date.		* Base date.
	* Cash flow estimate.		* Cash flow estimate.
		+	* Construction inflation.
	* Contract conditions.		* Contract conditions.
	* Contract sum.		* Contract sum.
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	* Procurement route.		* Procurement route.
	* Tender.		* Tender.
		+	* Tender inflation.

	=== External references ===		=== External references ===

Designing Buildings at 10:55, 13 January 2017

2017-01-13T10:55:05Z

← Older revision		Revision as of 10:55, 13 January 2017
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−	Fluctuations ~~are~~ a ~~way of~~ dealing with inflation on large projects ~~that may last for~~ several years. On smaller projects, the contractor will be ~~considered~~ to ~~have taken~~ into account ~~inflation~~ when calculating their price (a firm price). ~~However, on the~~ larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).	+	Fluctuations provisions in construction contracts provide a mechanism for dealing with the effects of inflation, which on large projects lasting several years can be very significant. On smaller projects, the contractor will be expected to take inflation into account when calculating their price (a firm price). On larger projects, the contractor may be asked to tender based on current prices (prices at an agreed base date) and then the contract makes provisions for the contractor to be reimbursed for price changes to specified items over the duration of the project (a fluctuating price).

	Fluctuation clauses in contracts may allow for:		Fluctuation clauses in contracts may allow for:

	* Changes in taxation.		* Changes in taxation.
−	* Changes in the cost of labour, transport and materials.	+	* Changes in the cost of labour, transport and materials (sometimes referred to as 'escalation').
	* Increases in head office or administrative costs.		* Increases in head office or administrative costs.

	Generally the contractor is not entitled to fluctuations after the completion date.		Generally the contractor is not entitled to fluctuations after the completion date.

−	The amount of fluctuations may be calculated from nationally published price indices (for example Joint Contracts Tribunal (JCT) bulletins) rather ~~that~~ calculating actual cost increases which ~~would~~ be very time consuming.	+	The amount of fluctuations may be calculated from nationally published price indices (for example Joint Contracts Tribunal (JCT) bulletins or public records) rather than calculating actual cost increases which could be very time consuming.

−	Payment calculations are then based on a project programme for activity and a payment chart against the programme resulting in a cash flow projection. Quarterly percentage assessments of inflation ~~for labour and materials~~ are then added to the projected figures ~~thus~~ allowing for price fluctuation. If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.	+	Payment calculations are then based on a project programme for activity and a payment chart against the programme resulting in a cash flow projection. Quarterly percentage assessments of inflation are then added to the projected figures allowing for price fluctuation.
		+
		+	If industry negotiated labour rates are known in advance or a particular commodity such as steel is subject to spiralling price rises, additional allowances may come into play.

	= Find out more =		= Find out more =
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	* Contract conditions.		* Contract conditions.
	* Contract sum.		* Contract sum.
		+	* Escalation.
	* Inflation.		* Inflation.
	* Procurement route.		* Procurement route.