When it is needed
The precondition is precise: an operation to be carried out for which no rate can be derived from the elenco prezzi unitari attached to the contract. It is not enough that a rate looks inadequate; it must be absent.
It should be distinguished from two neighbouring situations. If the operation is already in the schedule and only the quantity changes, the rate exists and is applied: no new rate is needed. If the operation stays the same and its cost changes through price movement, the situation is price revision, which operates by virtue of a contractual clause and follows a different regime.
A new rate therefore concerns only the case where the subject of the performance is new relative to the contract. Work already provided for is valued at the contract rate.
How the rate is determined
The method is price analysis, applied with the same structure used at design stage. Consistency of method keeps the new rate comparable with the others.
The quantities of materials, labour, plant hire and transport needed to produce one unit of the operation are estimated and the corresponding elementary prices applied, taken according to the hierarchy of sources set by law, meaning first the price books of the territorially competent regions and autonomous provinces. To the resulting technical cost are added the percentage for overheads, between 13 and 17 per cent, and the 10 per cent for the contractor's profit.
One further step must be checked in the capitolato speciale. Variations are normally valued by applying the rates in the schedule attached to the contract reduced by the discount percentage offered at tender, and contractual provisions ordinarily extend the same treatment to rates determined during construction. The actual wording of the clause should be read case by case, because it is the clause that governs the operation.
The procedure
The sequence involves three parties and must be followed in order. Each addresses a different aspect of the proposal.
The works supervisor identifies the need for the unforeseen operation and prepares the analysis of the new rate, documenting its components. Documenting the components is what makes the proposal verifiable.
The single project officer examines the proposal within their control function and handles the approval steps required by the contracting authority's own rules and by the specification. The step is not a formality, since it conditions the funding cover.
The contractor signs the record. That signature is the moment the new rate becomes binding, and the moment at which the contractor, if not in agreement, must enter its reservation under the applicable rules, failing which it lapses.
The signed record sits alongside the original schedule of rates and does not replace it. Both documents remain the reference for the accounts in respect of what each governs.
What it must contain
| Element | Why it matters |
|---|---|
| Description of the operation | Delimits the subject and distinguishes the new rate from an existing item |
| Reason it was not provided for | Documents why the operation did not appear in the contract |
| Unit and basis of measurement | Makes the item valuable without interpretation |
| Analysis of the rate by component | Makes the figure verifiable on technical grounds |
| Source of elementary prices | Allows the hierarchy of sources to be checked |
| Percentages applied | Documents overheads and profit and the reasoning behind them |
| Treatment of the discount | Clarifies how the tender discount applies |
| Signatures | Fixes the date and the binding effect of the agreement |
The row on the reason it was not provided for is the most often neglected and the one that holds or gives way at verification. An operation omitted from the design in error and an operation made necessary by a supervening circumstance have the same accounting effect and very different implications for design liability.
How they are prevented
New rates cannot be eliminated but they can be reduced, and the lever lies in how the schedule of rates is drawn up at design stage. A complete schedule of rates at design stage sharply reduces their number.
The criterion for inclusion is not the amount the item represents in the design but the likelihood of its quantity varying. Including in the schedule operations of modest economic weight but likely quantity variation means having an agreed rate available at the moment it is needed, rather than a negotiation to open.
In private construction
Private work has no formal procedure and the absence of any record is the norm, with the result that additional work is discussed once the site is running and valued by impression. Additional work ends up discussed once on site and priced by impression.
Even a simplified record, setting out description, unit of measurement, analysis of the rate and the parties' signatures, changes the balance of the discussion. It shifts the argument from the overall price to the structure of the rate, which is the ground on which a technical professional can argue.
Note: the legislative references in this page relate to Italy and are current as at the date of publication. Procedural arrangements depend on the specification of the individual contract: the contract documents should be checked before any operational use.