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NEC TSC: Is price adjustment under X1 monthly or annual?

+1 vote
31 views
We have a NEC3 option A TSC contract to deliver planned and reactive works.  The assessment interval for payment is monthly.  Is the contractor allowed to adjust his valuations monthly under secondary clause X1.  Extract from contract below:


The proportions used to calculate the Price Adjustment Factor are:

    0.57    linked to the index for People…..……………………….
    0.35    linked to the index for Plant and Materials..……..
    0.08    linked to the index for Equipment……………………….
        ________
    1.00
   

•    The base date for indices is July 2016
•    The indices are those prepared by: The Office for National Statistics (ONS)


Element    Proportion    Index
People     0.57    EARN01 Average Earnings Index for the Private Sector
Plant and Materials    0.35    Consumer Price Index
Equipment
    0.08    Consumer Price Index

I would have thought this would be reviewed annually at anniversary of contract and not monthly.

Many thanks
asked Jul 25 in NEC3 Secondary X, W & Y options by robert81 (160 points)  
   

1 Answer

+1 vote
In the unamended contract, the adjustment is made when a referenced index is updated - see clause X1.2.

Often this is changed to make it an annual adjustment.
answered Jul 25 by Jon Broome (21,320 points)