Commercial & contracts
Turn a change into a paid variation
Capture a scope change while it is fresh, price it as a contract variation on your agreed r…
3 steps11 minOpen
Cases / Commercial & contracts
Commercial & contracts
Apply the price variation formula on a public contract
Record the escalation clause with its components, weightages and base date, load the index series it names, compute the adjustment on the work done in the period, bill it and keep the arithmetic where a checker can repeat it.
How it works, step by step
5 steps across the platform - what you do at each one, and why it matters.
1
Write the clause down as parameters, not as prose
ContractsRecord against the contract each component the clause names and its weightage, which index series applies to each, what the base date is, whether a minimum period must pass before anything is payable, and whether a ceiling applies.
Why: The clause is read once, at the start, by whoever is available, and then applied for years by other people. Turning it into stated parameters at that first reading is what stops the third claim being computed on a different understanding from the first.
InThe contract conditionsOutComponents and their weightagesBase date, threshold and ceiling
2
Load the index series and pin the base month
Price IndexBring in the published series for each component, record the base month value the contract fixes, and add each period's value as it is published. Where a series is revised after publication, keep both the provisional and the final figure.
Why: Index series get revised, and a claim computed on a provisional figure has to be reworked when the final one lands. Holding both makes that a recomputation rather than a discovery, and it explains the difference to the checker before they ask.
InThe index series the clause namesOutBase and current index per component
3
Compute the adjustment on the period, component by component
BOQTake the value of work executed in the period from the bill, split it by the weightages, apply each component's index movement, and keep the working visible per component rather than as a single figure.
Why: Escalation is checked by re-doing it, not by reading it. Working that shows the split, the two index values and the resulting amount for each component can be verified in minutes; a single total invites the checker to compute their own and argue about the difference.
InValue of work done in the periodBase and current indicesOutThe adjustment for the periodWorking, component by component
4
Bill it as its own line, never inside the rates
FinancePut the adjustment on the running account bill as a separate line naming the period and the clause, and let the tax and the deductions treat it the way the contract and the invoice rules require.
Why: Escalation folded into rates makes the rates untraceable to the contract and the escalation untraceable to a period, so both become unverifiable at once. Kept as a line, it can be certified, queried or withheld on its own without touching the measured work.
InThe computed adjustmentOutEscalation as its own bill line
5
Keep the evidence with the period it belongs to
Claims EvidenceFile the published index pages used, the value of work certified for the period, and the working, all keyed to the period, so any single month can be produced on its own.
Why: Escalation is settled at the end of the job as often as during it, by which time the person who computed period four has left. A file organised by period answers a query about period four; a file organised by year does not.
InThe working and the published figuresOutA file that supports every period