Presentation on application of price adjustment to civil works contracts

  • The construction industry often faces challenges in terms of changes of prices of construction materials. This affects the completion of civil works contracts.
  • This price fluctuations occur mainly in countries with unstable local currencies.
  • In this regard, civil works contracts financed by credits from the World Bank are usually eligible for price adjustments if the duration of such contracts is over 18 months.
  • In recent times, the World Bank had revised its standard bidding document for civil works contract, and had adopted the FIDIC conditions of contract as its general conditions of contract. The latest standard bidding document for civil works without prequalification may be found here.
  • However, most contracts in Nigeria do not use the FIDIC conditions of contract. Therefore, engineers, procurement specialist, and other professionals in the construction industry seem not to understand the application of price adjustment in civil works contract.
  • This presentation intends to shed some light on how price adjustment may be applied to contracts. Our focus in this presentation is on the application during contract implementation and not during the bidding process.
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