ICTAD Price fluctuation Formula; Clarifying The Context in Which It Operates
by Dr. Chandana Jayalath*
The provisions of price adjustment on account of increase or decrease in costs of goods and services in construction contracts are practiced World over to have more realistic competitive bids and execution of contracts on just and equitable manner. Prices of materials, plant and labour are highly variable due to fluctuations in the currency market. Construction experts, therefore, thought it prudent to compute the cost of contracts on present price, keeping provisions of price adjustment for probable fluctuations. The Institute for Construction Training and Development (ICTAD) of Sri Lanka has undertaken among others, the standardization of “country specific” documents to regulate and streamline the administration of contracts. The Formula Method for Reimbursement of Price Fluctuation is one such initiative to offer a reasonable basis for calculating price adjustment for construction contracts.