CALCULATION OF PRICE ALTERATION IN CONSTRUCTION WORK

In accordance with the recent changes in the global market of construction materials and products, we offer educational services for Clients, Designers, Supervisors and Contractors on the rights and liabilities of compensating the difference in price for unfulfilled contracts in the public procurement works with fixed price of works, provided that the prices of works and items change to the extent where it is possible to apply the Methodology adopted by the Government of the Republic of Croatia, in accordance with: "Conclusion of the Government of the Republic of Croatia on mitigating the consequences of the global disruption in the markets of construction materials and products from June 21, 2022, NN 71/2022"

We also create useful examples of price change calculations for individual contract items, practical exmples of value of work analysis by defining all the neccessary steps to make price alteration samples – including determining the change coefficients of individual unit price elements as well as the calculation of the total difference in price for selected items.

As a part of this, we provide advisory services to Clients and Contractors on the application of sliding scale formulas to future contracts.

The methodology used includes a comprehensive analysis of the unit price of an individual item and the share of each of its maximum 5 components (material, labor, machines, fuel and fixed/unchangeable part) in the total calculation of the unit price.

Regardless of whether there are contracts in progress or future contracts in question, we apply the following sliding scale formula: k_pn = a + bxR_n/R₀ + cxM_n/M₀ + dxS_n/S₀ + exG_n/G₀ 

We inform construction participants on the optimal selection of a variant of the aforementioned formula, as well as all of its components, and we propose a way to include it into the contractual cost estimates.