Extraordinary unit prices in Mexico: when they apply and how they get approved
Last reviewed: Regulations change: the text is checked against the official source at each review.
An extraordinary unit price is the one determined to execute an item of work not contemplated in the contract's original schedule. It arises when the job needs something nobody allowed for when pricing, and its approval follows a formal procedure before the work can be billed.
The rule that costs most to ignore: executing first and processing afterwards is the fastest route to not being paid. Extraordinary work already executed, with no prior approval, is left to the goodwill of the contracting authority.
When it applies
It applies when the work required is not in the contracted schedule and cannot reasonably be assimilated to an existing item.
The typical causes:
- Site conditions different from those foreseen, such as ground that does not match the survey
- A design change that introduces new elements
- Undocumented buried services that force unforeseen work
- Regulatory changes or supervening requirements from an authority
- Errors or omissions in the design that force additional solutions
What is not an extraordinary price: a greater quantity of an item that does exist in the schedule. That is a volume increase and has its own treatment. Confusing the two is among the commonest errors and makes a submission fall on purely formal grounds.
The distinction to be clear about
| Situation | Figure | Treatment |
|---|---|---|
| More quantity of an existing item | Volume increase | Billed at the schedule rate, by agreement if it exceeds limits |
| New item, not contemplated | Extraordinary price | Requires build-up and price approval |
| Existing item executed in very different conditions | It depends | May require the price to be revisited |
The third case is the most arguable and the one that generates most negotiation. An item that exists in the schedule but is executed in radically different conditions — at greater height, with restricted access, at night — does not always fit the original price. There it pays to document the conditions from day one, before it turns into an argument.
How it is built up
An extraordinary price is built up with the same structure as any unit price, and that consistency is part of the argument: if your hourly rates, wages and factors do not match those of the original contract, the authority will raise it.
The general principle: extraordinary prices must stay congruent with the costs and factors of the original contract in everything applicable. If your bricklayer’s wage was one figure in the schedule, it cannot be another in the extraordinary price, unless a cost adjustment justifies it.
What does belong to the new price:
- The specific inputs that item requires
- The output rate proper to that activity
- The particular plant, if applicable
What must be inherited from the contract:
- Hourly plant rates already established
- Wages and the real wage factor
- Percentages for overheads, financing and profit
- Additional charges
The procedure, in order
- Detection. The site engineer identifies that the work required is not in the schedule.
- Entry in the bitácora. The same day, describing the fact and requesting instruction.
- Formal instruction from the authority. Without instruction there is no authorised work.
- Build-up of the price. With the structure and factors of the contract.
- Submission for approval.
- Review and ruling.
- Formalisation, typically through an agreement.
- Execution and billing.
Point three decides everything else. Many contractors act on a verbal instruction — “do it, we’ll sort it out later” — and find out afterwards that whoever gave it had no authority, or that nobody remembers giving it.
If you are instructed verbally and cannot wait, the minimum protection is to record it in the bitácora that day, describing the instruction, who issued it and in what terms. That the other party does not challenge the entry is already something.
Why they get rejected
No documented prior instruction. The number one reason.
Factors inconsistent with the contract. Different wages, different overhead percentages, hourly rates that do not match. It reads as an attempt to improve margin through the back door.
The item did exist in the schedule. Sometimes under another description. The authority will find it.
Unsupported output rate. A rate that pushes the price below the market without a technical explanation draws observations.
Late submission. Once the work is executed and even covered up, verification is impossible and the contractor’s position is weak.
No evidence of the condition that caused it. If the extraordinary price arises from a different condition on site, that condition has to be photographed and recorded before it is disturbed. Afterwards it does not exist.
The case of urgent work
This is the real situation the manuals leave out: a condition is discovered that forces immediate action, and waiting for the procedure would mean stopping the job or putting safety at risk.
There is no single answer, but there is a sequence that protects you:
- Record the finding in the bitácora, with a dated photograph, before disturbing it
- Give formal notice and request instruction
- If you have to act, record that you are acting out of urgency and reserving the right to process the price
- Document exhaustively during execution, with evidence of whatever will be covered up
- Process it as soon as possible
It does not guarantee payment. It substantially improves your position.
Frequently asked questions
- Can I refuse to execute extraordinary work without an approved price?
- It depends on the contract and on the nature of the work. Refusing carries risk, and executing without approval does too. The prudent path is to leave a written record of the request for instruction and of the absence of an approved price before taking either route.
- How long does approval take?
- Timescales depend on the applicable regulation and on the contract. In practice they vary widely. Submitting a complete file first time round is the variable that shortens it most: each round of observations adds weeks.
- Are extraordinary prices adjusted for inflation?
- They are subject to the contract's cost adjustment mechanisms as applicable. The base date and the treatment depend on when the price was built up; settle it at the moment of approval rather than afterwards.
- Is there a limit on the amount of extraordinary work?
- The LOPSRM sets limits on contract modifications in article 59. Exceeding them may require different procedures. It is one reason to read that article before stacking up agreements.
- What if the authority approves a lower price than the one I submitted?
- You may accept it or not, and that decision is worth documenting. If you execute without recording your disagreement, acceptance is presumed. If you record it, you keep the possibility of arguing it later.
Founder and CEO of Paladio. He has spent more than 15 years building financial products that touch the lives of millions of people. He writes about what he sees on site: how progress is really measured and where the money leaks.
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