One of the wide ranging problems which construction industry is facing is the fluctuation in prices of construction inputs which is causing most of the projects to be completed at cost much higher than the original contract prices. In the recent past, we have seen significant price escalation occurring not only with the basic construction materials but also with the labor and fuel which creates uncertainty among the participants involved in a construction project.
To overcome the effect of price fluctuations, certain methods or contract clauses are desired to deal with this uncertainty. The main purpose of the price adjustment clauses is to allow the contractors and clients to adjust the increase or decrease in prices. In addition to this, it also encourages competitive bidding.
The objective of this research study is to study importance of price adjustment in construction contract and analyzing the response of the different stakeholders in construction contracts regarding FIDIC formula and suggesting for improvement. Similarly, identifying different cost element, weightings and determining contingency is also goal of research so that price adjustment contract administration becomes systematic, equitable and with less ambiguity. Recently, the price fluctuation of construction materials and services in Nepal has become severe and very much unpredictable.
Most of the contractors in Construction Industry, especially local contractors, are facing strong challenges during bid process due to the high uncertainty of predicting what would happen during the course of the execution of the project. Based on the above explained fact, the research problem has been addressed in this research by conducting diagnostic survey among ten contracting firms working on ADB project, collecting data with the help of questionnaire, distributed to contractors, consultant, client and conducting desk study on ADB projects, World bank projects, Midhill highway and RIP projects under department of Road whose construction were started after 2014 and construction progress was more than 80 %.
Inhaltsverzeichnis (Table of Contents)
- CHAPTER ONE: INTRODUCTION
- 1.1 Study background
- 1.2 Problem Statement
- 1.3 Research Objective
- 1.4 Scope and Limitation
- CHAPTER TWO: LITERATURE REVIEW
- 1.5 Concept of Project
- 1.6 Civil Engineering projects
- 1.7 Construction Industry
- 1.8 Price fluctuation and Inflation
- 1.8.1 How does Inflation Happen?
- 1.9 Effects of Price fluctuation
- 1.10 Dealing with price escalation
- 1.10.1 Types of escalation clauses
- 1.11 Problems of Price Escalation and Adjustment
- 1.12 Price adjustment formula
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research explores the importance of price adjustment in construction contracts, specifically in the context of Nepalese road projects. The study aims to analyze the response of various stakeholders involved in construction contracts regarding the FIDIC formula and suggest improvements. Additionally, it aims to identify different cost elements, weightings, and determine contingency to make price adjustment contract administration more systematic, equitable, and less ambiguous.
- Importance of Price Adjustment in Construction Contracts
- Analysis of Stakeholder Responses to FIDIC Formula
- Identification of Cost Elements, Weightings, and Contingency
- Systematic, Equitable, and Less Ambiguous Price Adjustment Contract Administration
- Impact of Price Fluctuations on Nepalese Road Projects
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter One, Introduction, sets the stage for the research by discussing the background of the study, the problem statement, the research objectives, and the scope and limitations of the study. It focuses on the challenges posed by fluctuating construction input prices, particularly in the context of Nepalese road projects.
Chapter Two, Literature Review, delves into relevant theoretical concepts, exploring the concept of projects, civil engineering projects, the construction industry, price fluctuation and inflation, and various approaches to managing price escalation.
Schlüsselwörter (Keywords)
The research focuses on the critical aspects of construction contract administration, particularly the impact of price adjustment. Key terms include Standard Bidding Document, Asian Development Bank, Contract Administration, Price Adjustment, World Bank, and Procurement.
- Quote paper
- Sabin Koirala (Author), 2019, Study of Price Adjustment Contract Administration In Nepalese Construction Contracts (Road), Munich, GRIN Verlag, https://www.grin.com/document/913028
