Page 214 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
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admeasurement and they need bear no relationship to actual methods the
contractor uses.
Under ICE Conditions (Clause 14(7)) the engineer is only required to state
why a proposed method by the contractor fails to meet the contract require-
ments or would be detrimental to the permanent works. It is left to the con-
tractor to decide what method he will adopt to gain the engineer’s consent.
Hence, if the engineer has no reason to specify a particular method, he should
avoid mentioning any lest this be interpreted as a ‘specified requirement’ as
discussed above. Also acceptance of a method-related item in a contract does
not imply the engineer has given his consent to the method stated. The pre-
amble to the bill may need to make this clear.
15.11 Adjustment item to the total price

An adjustment item is an addition or deduction a tenderer makes to the final
total of his prices entered in the bills of quantities. The CESMM permits an
adjustment item as a lump sum addition or deduction, paid by instalments in
the same proportion as the total payments to date, less retention, bears to the
total of billed prices (see Section 16.4). The addition or deduction is not to be
exceeded, and the full amount is to be allowed when a certificate of substan-
tial completion for the whole works is issued.
In contracts which do not follow the CESMM a tenderer may be free to add
an adjustment item to his tender – or in fact add any additional item for which
he submits a separate price. His tender is only an ‘offer’ so he is free to offer his
price in any way he likes. The employer can, of course, lay down rules that he
will not entertain any offer that is not priced as he instructs, but this is a rule for
himself. The tenderer has to run the risk that his non-conforming tender will
not be considered: but this is rather unlikely to happen if his bid is the lowest.
Thus, instead of inserting a lump sum addition or deduction as required by
the standard method, he can insert an adjustment item which comprises a
percentage reduction (or, more rarely, addition) to be applied to all his billed
prices. Sometimes this practice is actually invited by the employer who invites
tenders for two separate contracts simultaneously, and provides a special item
in one contract for the contractor to quote his reduction of price (if any) if he
were awarded both contracts.
An adjustment item as such is usually added by a tenderer when – after hav-
ing had all the items in the bill priced and totalled – he looks at the final total
so derived and decides to increase or decrease it. This is his commercial deci-
sion. He will have made a check estimate of the cost of the whole contract in an
entirely different manner from that obtained by totalling the priced quantities
in the bills. This can be done, for instance, by costing the total materials and
estimated labour and plant to be used on the job, and adding a percentage
for overheads and profit. In the light of his findings and taking into account
other factors, such as risk, need for more work or the likely competition from