1. This method has been prepared in accordance with article 51.2 of the Law of the Republic of Azerbaijan “On public procurements” and governs making of changes to contract’s price during performance of procurement contract for reasons not depending on activity of tenderer, which won tender as well as activity of procurement agency.

2. This method shall apply only in cases provided for in collection of basic tender conditions.

3. This method shall apply only to contracts with implementation period of more than one year.

4. Changes in prices of procurement contract shall be made according to following formula:

P1=P0(a(M1/M0)+b(L1/L0)+c)-P0

P1 - amount to be paid to consignor (contractor) as a result of change of contract’s price;

P0 - price of concludved contract;

a - coefficient reflecting relative price of goods in contract price;

b - coefficient reflecting relative price of workforce in contract price;

c - coefficient reflecting relative price of income and other expenses provided for in contract price;

M0, M1 – price indices of goods in country of origin to the date of making changes to base date and prices respectively;

L0, L1 - price indices of workforce in country of origin to the date of making changes to base date and prices respectively;

Note: sum of coefficients a, b and c shall equal to unit (a+b+c=1).

5. Coefficients a, b and c shall be stated by tenderer in tender proposal and shall be taken into account by procurement agency at assessment and comparison of tender proposals.

6. Consignor (contractor) shall state in tender proposal origin of indices available to the base date (L0, M0) and indices available to the date of making changes to prices (L1, M1).

Indicated indices in the Republic of Azerbaijan shall be based on official information of the State Statistics Committee of the Republic of Azerbaijan. Such figures from other countries shall be based on official sources of respective states (governments) and shall be approved (legalized) in duly order.

7. Base date shall be determined as 30 (thirty) days before commencement of tender procedures. Date of making changes to concluded contract’s prices shall be determined in the period of performance of works.

8. If price of concluded contract (P0) changes, following conditions shall be complied with:

price of concluded contract (P0) can be changed if volume of general increase or decrease is more than 2 percent;

price of concluded contract (P0) shall not be changed for more than 10%;

no changes to price shall be made after expiry of initial (extended) term of concluded contract;

no changes to price shall be made due to delays occurred in performance of the contract as a result of consignor (contractor) negligence. Procurement agency shall be entitled to reduce price of the contract because of such delays;

if under submitted document currency indicated in concluded contract is different from other countries currencies, their rate shall be calculated to the day of making changes in the contract’s price under rate determined by National Bank of the Republic of Azerbaijan;

no changes shall be made in payment made in advance to consignor (contractor) under concluded contract.