A contractor in Hong Kong has taken a construction project which allows for using the price fluctuation factor (PFF) to calculate the contract price adjustment. The method for calculation is the Baxter method but with slight modification. Calculate the total price fluctuation factor based on the following assumptions.

There is no index figure for providing and maintaining plant in Hong Kong. The percentage for this aspect is apportioned among the other items. Thirty percent of it is added to labour cost and the remaining 70 per cent is added to the material costs.

Twenty per cent of the contract value is taken to be non-adjustable.

Fill the blanks in the following tables and calculate the amount of price adjustment.

Cost items	Agreed percentage of contract value	Add for plant
		Factor	Add to tender	Percentage	Proportion
Labour	25
Steel bars	15
Concrete	10
Timber	5
Aggregate	6
Bricks	2
Diesel fuel	12
Bitumen	5
Provide and maintain plant
Total
All other costs not subject to adjustment
Total including non-adjustable items

Cost items	Index		Proportional change		Index proportion	factor
	Base	Current
Labour	199	250
Steel bars	153	167
Concrete	201	211
Timber	200	150
Aggregate	157	190
Bricks	140	140
Diesel fuel	150	180
Bitumen	200	350
Total Price fluctuation factor

If the value of the work completed is 1.3 million HK dollar, what is the amount of price adjustment?

Answer rating: 100% (QA)

Total Price Fluctuation Factor 250199 167153 211201 150200 190157 140140 180150 350200 30100 ... View the full answer