Original scientific paper
https://doi.org/10.2478/otmcj-2024-0009
Contract price change during the construction phase: unforeseen market conditions
Natasa Suman
; University of Maribor, Faculty of Civil Engineering, Transportation Engineering and Architecture, Maribor, Slovenia
Stanko Tominc
; Javno podjetje Nigrad, d. o. o., Maribor, Slovenia
Abstract
The unstable economic conditions that have been
in place in the Slovenian and international construction
markets reveal the problem of a disproportionate increase
in the prices of construction materials and energy products.
Such increases will therefore result in higher costs of construction services, which would ultimately affect the total
value of the construction project. These events in turn
bring uncertainty to the construction project and would
negatively impact the business of construction companies
and investors. Legal and construction practices have so
far developed various ways to regulate contract changes
arising due to unforeseen market conditions. The present
paper offers a contribution to the contract price change
solution during the construction phase. The introduction
first presents the measures and guidelines that deal with
the differences in contract prices in Slovenia and some
other countries. Then, various methods of calculating
price differences that have emerged in current Slovenian
practice are described. As a result, a proposal for a hybrid
method of monthly price difference calculation is presented. The hybrid method represents a balanced solution
resulting from the unforeseen increase in construction
material prices on the market and is applicable to all construction projects. The three methods, i.e., a calculation
method, a method based on the GZS-ZGIGM index, and a
hybrid method, are applied to a real example of a public
contract. The calculation of the price valorisation, rep
resented as an index of the recognised price increases of
contract works, is carried out. The results are compared,
and further solutions are proposed.
Keywords
construction contract, construction market, contract price, price index
Hrčak ID:
321152
URI
Publication date:
3.10.2024.
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