EXAMPLE OF APPLICATION OF PRICE-LOADING


Firm
Total Tender Sum ($m) and accumulated default points
Effective Tender Sum (%)
Price-loading factor (%) (0.2% for each default point)
Computation of Price-loading ($m)
Applicable Price-loading ($m)

Effective Tender Value ($m)

 
 (a)
 (h)
 (c)
 (d)=(a)x(b)x(c)
 (e)=(d)
subject to $2m maximum
 (f)=(a)+(e)
A

301.0

(2 default points)

90%
0.4
1.0836
1.0836
302.0836
B
300.0

(4 default points)
90%
0.8
2.16
2.0
302.0
C

301.3

(1 default point)

90%
0.2
0.54234
0.54234
301.84234

In the above example, based on the effective tender value, Firm C will be awarded the tender at his tendered sum of $301.3 million, even though Firm A and B has tendered lower actual prices of $301 million and $300 million respectively.