Price Adjustments in Construction Contracts

Construccion Carretea Libertad Chontales

TODAY NICARAGUA – The construction guild is proposing that in tenders for construction of public works a clause on price adjustments always be included, to reflect changes in prices of raw materials.

The Nicaraguan Chamber of Construction (CNC) argues that with the drop in fuel prices, some public works projects are being tendered with prices which were established in relation to this situation, but fear that within one or two years these costs may rise once again and that would impact the construction.

Rodrigo Pereira, the new president of the CNC, told that “… There are projects that are two years or 18 months in (to their execution) from a bidding process and these projects as well as the institutions financing them such as the Central American Bank for Economic Integration, Interamerican Development Bank, are not taking into consideration the polynomial formula which is a price adjustment mechanism given so that contracts can be adjusted.”