Nepal Introduces Price Adjustment Mechanism for Public Construction

What if material costs increase beyond 25 percent of contract value?

Simulate the impact on a typical construction project if material and labor costs rise 35 percent above baseline due to sustained supply chain disruption. Under the new procedure, contractors would receive a maximum 25 percent adjustment on the original contract value. Model the project budget gap, contractor viability, and timeline implications when adjustment caps are hit.

What if the 45-day approval window delays project progression?

Model a scenario where contractors must wait 45 days for price adjustment approval. During this period, project work may slow or halt pending financial certainty. Simulate the cascading effect on dependent infrastructure timelines, subcontractor payments, and material procurement schedules across multiple concurrent public projects.

What if multiple contractors from the same supply base apply simultaneously?

Simulate the procurement impact if 20 to 30 public construction contractors submit price adjustment applications in the same window, all citing identical material and labor cost increases from the same suppliers. Model potential material price verification bottlenecks, agency resource constraints, and risk of duplicate benefit detection across jurisdiction boundaries.