Amendment of Saudi Arabia Public Works Contract from Fixed-Price to Price Adjustment Contract
1Ministry of Municipal and Rural Affairs, Saudi Arabia
2Procurement Senior of Ezz Flat Steel Company, Egypt
3Structural Engineering Dept., Faculty of Engineering, Cairo University, Giza, Egypt.
Abstract: The price adjustment contract is engineering contract that includes articles allow the adjustment of the contract price (either by increasing or decreasing) according to the terms agreed between the contract’s parties. This contract type includes mathematical equation which called Contract Price Adjustment (CPA) that grants enough flexibility to adjust the contract’s price in order to eliminate the risk of price fluctuation of contract’s components. Federation International Des Ingeniers – Consells (FIDIC) presented a formula for price adjustment in which, both parties should agree on the variables of such formula and the limitations of applying it as well. In this paper, a questionnaire survey and several interviews with experts in the field of high way and road way construction projects are conducted in order to extract the data needed to formulate the price adjustment that could be applied in the contracts of such type of projects. The stated formula is presented in order to be utilized in amending the standard Saudi Arabia public works contract (which is considered as a fixed-price contract) to be more flexible in dealing with the variations in material prices faced by the contractors during the execution of the contract works.
[Eissa Asiri, Ahmad Al-Dokhmasey and Moheeb El-Said. Amendment of Saudi Arabia Public Works Contract from Fixed-Price to Price Adjustment Contract. J Am Sci 2013;9(6):338-346]. (ISSN: 1545-1003).http://www.jofamericanscience.org. 39
Keywords: Public Works Contract, Price Adjustment Contract, Project items, The price adjustment formula. Full Text 39