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Forum Home > General Discussion > Unrealistically low/high rates in bq

samwong
Member
Posts: 5

Dear Samuel,

 

I came across a question which need your advice.

 

The Contractor has mispriced rate for 50mm concrete blinding at RM 10/m3.  This item was not rationalised during Contract Documentation. The original quantity was 100m3 but remeasured quantity was 1,000m3.

So is the Contractor entitled to revise the rate based on PAM 2006 ?  Clause 11.6 (b) clearly states that where work is of similar character & is executed under similar conditions, but there is a significant change in the quantity of work carried out, the rates & prices in the Contract Document shall be the basis for valuation which shall include a fair adjustment in the rates to take into account such differences.

I found from case laws like Dudley Corporation vs Parsons & Morrin Ltd (1959) & Henry Boot vs Altom (2000) where the judges ruled that rates in bq shall be used irrespective of the rates, whether it is unrealistically high or low.

Thank you.


SAM

May 17, 2014 at 3:55 AM Flag Quote & Reply

Sr Samuel Chong
Member
Posts: 103

Apologies for not looking into your question earlier.

According to PAM Clause 11.6(b) - " ... the rates and prices in the Contract Document shall be the basis for determining the valuation which shall include a fair adjustment in the rates to take into account such difference;"

So, according to this clause, the QS can determine a new rate by including '... a fair adjustment ...'.   This principle of allowing fair adjustment or fair market rate when the quantity far exceeds the original appeared in other law cases and that is why / how PAM incorporates those cases and draft up this clause.

I havent finished reading the law cases you quoted but they appear to use different Conditions which specifically spell out the intention of using the contract rates irrespective of whether they are unrealistically high or low.  Hence, they are bound by their conditions of contract.


May 28, 2014 at 3:10 AM Flag Quote & Reply

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