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What can lead to an adjustment in prices?
There shall be added to or deducted from the Contract Price such sums affecting the execution of the Work caused by any of the following: an event of force majeure including abnormal changes in costs of materials, increases in labor costs mandated by law or wage order, increase in the cost of oil, and the deterioration of peace and order.
Adjustment of prices due to escalation or reduction of costs of executing the work shall be made using a parametric formula to be agreed upon by the parties. In default of such agreement, the parametric formula of the Department of Public Works & Highways [DPSWH] shall be applied.
The adjustment of prices shall be determined on the basis of the original Contract unit prices of labor and materials and such unit prices in effect during the relevant period of work accomplishment.
The Contract Price shall be adjusted, not oftener than once a month, due to increase or decrease of the direct cost of labor and materials of more than five percent (5%) of the original Contract unit prices of the relevant items of work. The adjustment shall include the first five percent (5%).
In case the project is behind schedule by more than fifteen percent (15%) from the approved construction schedule, not due to excusable delays, the payment for work accomplished shall be made on the basis of the Contract Price as adjusted in accordance with the escalation rate applicable during the period in which it should have been accomplished
These adjustments shall not apply to an increase or decrease in the cost of materials and services provided or supplied by the Owner.