Price Escalation Calculator (India, CPWD 10CC & Index Formula)

About the Price Escalation Calculator (India, CPWD 10CC & Index Formula)

Work out the price variation of a construction contract quarter by quarter. In CPWD clause 10CC mode the calculator builds the cost of work done in each quarter exactly as sub-para (ii) of the clause lays it out — the gross value of work done, secured advances and advance payments paid and recovered, extra items at market rates, the 85% factor and the recoveries for departmental materials and services — and then each component’s variation: cost of work × share × (index − base index) ÷ base index, with the base date at the last date for receipt of tenders. Materials indices are averaged over the three months of the quarter; labour uses the minimum wage on the last day of the previous quarter.

The index formula mode covers private and other contracts: a fixed element plus weighted indices, Pa = Po × [F + Σ (w × I ÷ I0)] ÷ 100 − Po, with an optional threshold and ceiling. Indices are entered from the official releases your contract names, and each one carries its source in the statement. The free preview shows your entries, the quarters and the index changes, with the amounts hidden; a Premium pass unlocks the figures, the PDF statement and the CSV.

Common uses

• Contractors preparing the escalation claim with each running bill on a CPWD or state PWD contract.
• Engineers checking a contractor’s 10CC claim quarter by quarter.
• Private developers and contractors applying a price variation formula agreed in the contract.
• Claims and arbitration work that needs the working of every quarter.

Clause 10CC step by step

Under clause 10CC of the CPWD General Conditions of Contract:

• When it applies: only for work done in the stipulated period (and a justified extension under clause 5 without action under clause 2), and only when the stipulated period is more than the period in Schedule F.
• Base date: the last stipulated date for receipt of tenders, including extensions.
• Cost of work (sub-para (ii)): C = A − B; F = D − E (secured advance, other than materials under clause 10CA, paid fresh less recovered); I = G − H (advance payment made less recovered); J = extra items and deviated quantities paid at market rates under clause 12; M = C + F + I − J; N = 0.85 × M; W = N − (K + L), K and L being departmental materials (clause 10) and services at fixed charges (clause 34) recovered in the quarter.
• Components: the shares of materials (other than cement, reinforcement, structural steel, POL and other materials under clause 10CA), labour and others are fixed in Schedule F.
• Variation: V = W × share ÷ 100 × (index − base index) ÷ base index, for each component; a fall in the index is recovered the same way.

Which index, which month

• Materials: the all-India wholesale price index for the civil (or electrical) component of construction materials, worked out from the indices of the commodities with their weightages, published by the Office of the Economic Adviser; a quarter’s index is the arithmetical average of its three months.
• Labour: the minimum wage of an unskilled adult male mazdoor — the higher of the Government of India’s notification (see the Chief Labour Commissioner’s minimum wages) and the local one — on the last day of the quarter before the one being worked out; the base is the wage on the base date.
• Other contracts may name the Labour Bureau’s consumer price index for industrial workers or another index: enter what your contract says.
• Quarters: the first is the three calendar months after the month in which the tender was accepted, then every three months; the last may be shorter at completion.

When the index series changes

The Office of the Economic Adviser now publishes the wholesale price index on a 2022-23 base. Never divide an index of one series by an index of another. Where the base index is from the 2011-12 series and the current ones from the 2022-23 series, convert the base with the linking factor the Office publishes (old series = factor × new series): all commodities 1.53, primary articles 1.71, fuel and power 1.65, manufactured products 1.44. The Office notes that it prescribes no linking method and that links at the level of single items are not reliable, so follow your contract or the engineer-in-charge’s decision.

The index formula

For contracts that are not on CPWD conditions, the Manual for Procurement of Works of the Department of Expenditure gives an example formula (annexure 14): Pa = Po × [F + a × M1 ÷ M0 + b × L1 ÷ L0] ÷ 100 − Po, where F is the fixed element (10% to 25%) not subject to variation and a and b the shares of materials and labour, adding up to 100 with F. Its illustrative clause adds a base date at the due date of opening of bids, a ceiling, and no adjustment when it is 2% of Po or less. This mode takes any number of weighted indices, a threshold and a ceiling for each period.

Sources

• CPWD General Conditions of Contract — clause 10CC
• Office of the Economic Adviser — wholesale price indices; linking factors
• Labour Bureau — consumer price index for industrial workers
• Chief Labour Commissioner (Central) — minimum wages
• Department of Expenditure, manuals — Manual for Procurement of Works, annexure 14

The contract’s own clause and the engineer-in-charge decide the escalation actually paid.

Limitations

• Indices are entered by you from the official releases: the calculator has no index data of its own.
• Cement, reinforcement bars, structural steel, POL and other materials under clause 10CA are worked out under that clause, not here.
• A period with an averaged index takes one value for each of its months (up to 12); a clause 10CC quarter is three months, and only the last one may be shorter.
• In the index formula the threshold and the ceiling apply to each period on its own value; a ceiling on the whole contract has to be watched in the cumulative column.
• For work in a justified extension of time, enter the indices clause 10CC allows (those at the updated stipulated date of completion); the tool does not freeze them by itself.
• Your contract is kept in this browser on this device: download a backup to move it or keep it safe.

Privacy

The contract, its components and quarters are kept in this browser’s storage on your device and never sent to MySmartCoPilot or anyone else. The statement is made on your device.