Civil Engineering Project Management (4th Edition)
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
194 <strong>Civil</strong> <strong>Engineering</strong> <strong>Project</strong> <strong>Management</strong><br />
admeasurement and they need bear no relationship to actual methods the<br />
contractor uses.<br />
Under ICE Conditions (Clause 14(7)) the engineer is only required to state<br />
why a proposed method by the contractor fails to meet the contract requirements<br />
or would be detrimental to the permanent works. It is left to the contractor<br />
to decide what method he will adopt to gain the engineer’s consent.<br />
Hence, if the engineer has no reason to specify a particular method, he should<br />
avoid mentioning any lest this be interpreted as a ‘specified requirement’ as<br />
discussed above. Also acceptance of a method-related item in a contract does<br />
not imply the engineer has given his consent to the method stated. The preamble<br />
to the bill may need to make this clear.<br />
15.11 Adjustment item to the total price<br />
An adjustment item is an addition or deduction a tenderer makes to the final<br />
total of his prices entered in the bills of quantities. The CESMM permits an<br />
adjustment item as a lump sum addition or deduction, paid by instalments in<br />
the same proportion as the total payments to date, less retention, bears to the<br />
total of billed prices (see Section 16.4). The addition or deduction is not to be<br />
exceeded, and the full amount is to be allowed when a certificate of substantial<br />
completion for the whole works is issued.<br />
In contracts which do not follow the CESMM a tenderer may be free to add<br />
an adjustment item to his tender – or in fact add any additional item for which<br />
he submits a separate price. His tender is only an ‘offer’ so he is free to offer his<br />
price in any way he likes. The employer can, of course, lay down rules that he<br />
will not entertain any offer that is not priced as he instructs, but this is a rule for<br />
himself. The tenderer has to run the risk that his non-conforming tender will<br />
not be considered: but this is rather unlikely to happen if his bid is the lowest.<br />
Thus, instead of inserting a lump sum addition or deduction as required by<br />
the standard method, he can insert an adjustment item which comprises a<br />
percentage reduction (or, more rarely, addition) to be applied to all his billed<br />
prices. Sometimes this practice is actually invited by the employer who invites<br />
tenders for two separate contracts simultaneously, and provides a special item<br />
in one contract for the contractor to quote his reduction of price (if any) if he<br />
were awarded both contracts.<br />
An adjustment item as such is usually added by a tenderer when – after having<br />
had all the items in the bill priced and totalled – he looks at the final total<br />
so derived and decides to increase or decrease it. This is his commercial decision.<br />
He will have made a check estimate of the cost of the whole contract in an<br />
entirely different manner from that obtained by totalling the priced quantities<br />
in the bills. This can be done, for instance, by costing the total materials and<br />
estimated labour and plant to be used on the job, and adding a percentage<br />
for overheads and profit. In the light of his findings and taking into account<br />
other factors, such as risk, need for more work or the likely competition from