<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The unstable economic conditions that have been in place in the Slovenian and international construction markets reveal the problem of a disproportionate increase in the prices of construction materials and energy products. Such increases will therefore result in higher costs of construction services, which would ultimately affect the total value of the construction project. These events in turn bring uncertainty to the construction project and would negatively impact the business of construction companies and investors. Legal and construction practices have so far developed various ways to regulate contract changes arising due to unforeseen market conditions. The present paper offers a contribution to the contract price change solution during the construction phase. The introduction first presents the measures and guidelines that deal with the differences in contract prices in Slovenia and some other countries. Then, various methods of calculating price differences that have emerged in current Slovenian practice are described. As a result, a proposal for a hybrid method of monthly price difference calculation is presented. The hybrid method represents a balanced solution resulting from the unforeseen increase in construction material prices on the market and is applicable to all construction projects. The three methods, i.e., a calculation method, a method based on the GZS-ZGIGM index, and a hybrid method, are applied to a real example of a public contract. The calculation of the price valorisation, represented as an index of the recognised price increases of contract works, is carried out. The results are compared, and further solutions are proposed.</p>
</abstract>

The unstable economic conditions that have been in place in the Slovenian and international construction markets reveal the problem of a disproportionate increase in the prices of construction materials and energy products. Such increases will therefore result in higher costs of construction services, which would ultimately affect the total value of the construction project. These events in turn bring uncertainty to the construction project and would negatively impact the business of construction companies and investors. Legal and construction practices have so far developed various ways to regulate contract changes arising due to unforeseen market conditions. The present paper offers a contribution to the contract price change solution during the construction phase. The introduction first presents the measures and guidelines that deal with the differences in contract prices in Slovenia and some other countries. Then, various methods of calculating price differences that have emerged in current Slovenian practice are described. As a result, a proposal for a hybrid method of monthly price difference calculation is presented. The hybrid method represents a balanced solution resulting from the unforeseen increase in construction material prices on the market and is applicable to all construction projects. The three methods, i.e., a calculation method, a method based on the GZS-ZGIGM index, and a hybrid method, are applied to a real example of a public contract. The calculation of the price valorisation, represented as an index of the recognised price increases of contract works, is carried out. The results are compared, and further solutions are proposed.

Contract price change during the construction phase: unforeseen market conditions

Organization, Technology and Management in Construction: an International Journal

This work is licensed under the Creative Commons Attribution 4.0 International License.

The unstable economic conditions that have been in place in the Slovenian and international construction markets reveal the problem of a disproportionate...

Contract price change during the construction phase: unforeseen market conditions

Article Category: Research Paper

Published Online: Jun 19, 2024

Page range: 109 - 122

Received: Jan 19, 2024

Accepted: Apr 23, 2024

DOI: https://doi.org/10.2478/otmcj-2024-0009

Keywords
construction contract, construction market, contract price, price index

© 2024 Natasa Suman et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Contract price change during the construction phase: unforeseen market conditions

Article Category: Research Paper

Published Online: Jun 19, 2024

Page range: 109 - 122

Received: Jan 19, 2024

Accepted: Apr 23, 2024

DOI: https://doi.org/10.2478/otmcj-2024-0009

Keywordsconstruction contract, construction market, contract price, price index

© 2024 Natasa Suman et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
construction contract, construction market, contract price, price index