Price escalation

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Price escalation

Post by carlim14 on Tue Jun 01, 2010 2:17 pm

The IRR of R.A. 9184 allows the adjustment of the contract cost of the largest single contract using NSO indices. May we respectfully inquire what is the reckoning date: the completion date or bidding date of the contract? In this particular case, the contract cost does not include price escalation on any of the progress billings. Please note that the contract cost or price was established at the date of bidding.
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Re: Price escalation

Post by riddler on Tue Jun 01, 2010 3:31 pm

carlim14 wrote:The IRR of R.A. 9184 allows the adjustment of the contract cost of the largest single contract using NSO indices. May we respectfully inquire what is the reckoning date: the completion date or bidding date of the contract?

carl, we have made discussions in this forum on that reckoning date and i thnk everybody agrees that the last day of the computing the SLC is at the date of the Bid Opening reckoned backward by number of years according to the PE's qualification requirement. Very Happy

carlim14 wrote: In this particular case, the contract cost does not include price escalation on any of the progress billings. Please note that the contract cost or price was established at the date of bidding.

All procurements contracts of the government must include clauses for escalation, that is already a law carl.. it is included in the PBD (see clause 48 of the PBD) which form as integral part of the contract. Very Happy
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Re: Price escalation

Post by carlim14 on Tue Jun 01, 2010 5:25 pm

is it the bidding date of the SLC or the completion date of the SLC?
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Re: Price escalation

Post by sunriser431 on Wed Jun 02, 2010 12:27 am

Latest guidelines issued by the GPPB http://www.gppb.gov.ph/issuances/Guidelines/2008/Price%20Escalation.pdf
and latest GPPB opinion http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=609
Interesting topic, I'll be on watch mode. bounce
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Re: Price escalation

Post by riddler on Wed Jun 02, 2010 10:19 am

carlim14 wrote:is it the bidding date of the SLC or the completion date of the SLC?

it is the completion date of the SLC. Very Happy
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Re: Price escalation

Post by jeromefamadico on Tue Mar 06, 2012 5:54 pm

i would like to ask..

isn't it that in the National Statistical Coordination Board (NSCB) Resolution No. 12, "Approving the Rebasing of the Construction Materials Wholesale Price Index to Year 2000", it says that we will now be using the 2000-based CMWPI and not anymore the 1985-based CMWPI?

I noticed, however, that in the 2000 Price Index, some of the items in the 1985 Price Index were deleted. And being so, i found out that the computation for the K Factor in some items will be affected. For instance the Rock Excavation (K2), the formula for this is: 0.15 + 0.05 (Li/Lo) + 0.27 (Zi/Zo) + 0.12 (Fi/Fo) + 0.38 (Ei/Eo). L=Labor, F=Fuel, E=Equipment & Z=Blasting.

In the 2000 Price Index, Blasting is already deleted. This is now my problem. What will happen then in this formula.? Is there a revised Parametric Formula for K which is now based on the 2000 Price Index?

Please help. Thanks a lot. God bless.

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Re: Price escalation

Post by RDV @ GP3i on Wed Mar 07, 2012 11:38 am

jeromefamadico wrote:i would like to ask..

isn't it that in the National Statistical Coordination Board (NSCB) Resolution No. 12, "Approving the Rebasing of the Construction Materials Wholesale Price Index to Year 2000", it says that we will now be using the 2000-based CMWPI and not anymore the 1985-based CMWPI?

I noticed, however, that in the 2000 Price Index, some of the items in the 1985 Price Index were deleted. And being so, i found out that the computation for the K Factor in some items will be affected. For instance the Rock Excavation (K2), the formula for this is: 0.15 + 0.05 (Li/Lo) + 0.27 (Zi/Zo) + 0.12 (Fi/Fo) + 0.38 (Ei/Eo). L=Labor, F=Fuel, E=Equipment & Z=Blasting.

In the 2000 Price Index, Blasting is already deleted. This is now my problem. What will happen then in this formula.? Is there a revised Parametric Formula for K which is now based on the 2000 Price Index?

Please help. Thanks a lot. God bless.

Per GPPB Guidelines on Contract Price Escalation: "In the absence of any price index for a specified adjustable item, the price index of the nearest Related item shall be used."
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