The Formula for Price Adjustment is to determine a Pn factor for each IPC. The weightages or coefficients of different materials are given in the Appendix-C with a fixed portion also. As per Formula the sum of fixed portion and weightages of all materials (adjustable portions) shall always be one (01). Now the question is that if in any month we have not used a particular material say Bitumen then the Pn value will be calculated including the Bitumen or without Bitumen. If it is without Bitumen then the sum of weightages will not be one.
The best way to explain, is to have a look at the formula itself. The adjustment to the monthly statement in respect of changes in cost is determined from the following formula.
Pn = A + b Ln/Lo + c Mn/Mo + En/Eo + ………………
Where b, c, d etc. are coefficients representing the estimated proportion of each cost element in the works while a is a constant specified in Appendix C to bid representing the non adjustable portion in contractual payments. To study this we consider in above formula, c stands for bitumen and Mn & Mo stand for current cost indices and base cost indices respectively. You will note from here that there is no mention of bitumen quantity and only Mn shall vary with time. From here we can conclude that Pn value will be calculated including the bitumen.
The formula only works out a multiplying factor for the boq rate based amounts of IPCs to update them to today's value under consideration with the help of indices published by a nominated body in the country for specified items.The formula contain no reference to quantities and as such no linkage with it except at tender stage when their factors were calculated on basis of ratio of item cost that it bears to the tendered amount.This becomes reference point then for up-dation of ipc amounts with time on the basis of market trend so assessed with the help of indices.The adjustment formula is applicable to all specified items whether consumed or not.I hope this make it clear.
Reference of PEC Rules for adjustment of price but bidding document do not contain exact text of these Rules. Now It is customary but The best option would be to have a copy downloaded and then get its content certified from Registrar as this amendment is still not ratified by PEC officially..
The best way to explain, is to have a look at the formula itself. The adjustment to the monthly statement in respect of changes in cost is determined from the following formula.
Pn = A + b Ln/Lo + c Mn/Mo + En/Eo + ………………
Where b, c, d etc. are coefficients representing the estimated proportion of each cost element in the works while a is a constant specified in Appendix C to bid representing the non adjustable portion in contractual payments. To study this we consider in above formula, c stands for bitumen and Mn & Mo stand for current cost indices and base cost indices respectively. You will note from here that there is no mention of bitumen quantity and only Mn shall vary with time. From here we can conclude that Pn value will be calculated including the bitumen.
The formula only works out a multiplying factor for the boq rate based amounts of IPCs to update them to today's value under consideration with the help of indices published by a nominated body in the country for specified items.The formula contain no reference to quantities and as such no linkage with it except at tender stage when their factors were calculated on basis of ratio of item cost that it bears to the tendered amount.This becomes reference point then for up-dation of ipc amounts with time on the basis of market trend so assessed with the help of indices.The adjustment formula is applicable to all specified items whether consumed or not.I hope this make it clear.
Reference of PEC Rules for adjustment of price but bidding document do not contain exact text of these Rules. Now It is customary but The best option would be to have a copy downloaded and then get its content certified from Registrar as this amendment is still not ratified by PEC officially..
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