5.
b)
It is eminently flexible and additional target rates
can be agreed as information becomes available.
c)
a)
e)
It ensures that the Government is aware of the actual
cost of the job and at the same time facilitates
forecasting of costs.
It is reasonably simple to administer and ensures
that the maximum effort can be put into the actual
construction of the job rather than into discussions
about payment.
It is not a "cost plus" job. It provides an incentive
both to the Government and to the Consortium for the
economic completion of the job.
We propose that the Contract should include provisións to
take account of price fluctuations arising after an agreed
date prior to the date of the contract, including fluctuations
resulting from any special distortions of the market, and
of exchange rate variations. It would also provide for
the re-negotiation of oncosts should considerations of
volume of work and programme warrant it.
These factors will be taken into account in arriving at
the Final Target Price.
We also propose that interim payments for site works should
be made monthly in advance, based on an expenditure estimate
to be submitted monthly by the Consortium and checked
by the Engineer. Expenditure would be jointly reconciled
at the end of each month, the balance being added to or
deducted from the succeeding interim payment sum.