Quick answer: A rise and fall clause lets an electrical contractor recover documented increases in labour and material costs that happen after the tender is priced. If your contract does not have one, use a short tender validity period and refresh your supplier pricing before you submit, because on a fixed price job the contractor carries every cost increase.

Key takeaways

• On a lump sum job the price is fixed, so any cost increase between tender and completion comes out of your margin.
• A rise and fall clause adjusts the price for actual cost increases measured against a baseline you list at tender. It generally works one way: it lets the price rise, but it does not bring it down when costs fall.
• A clear expiry date on every tender is the simplest protection you control yourself.
• Rules on these clauses differ by state for domestic work, so check before you rely on one.

Why is October a risky time to leave a tender price open?

Because interest rates, labour demand and costs are all moving the same way at once. In our September post we covered how to price tenders as demand rebounds. This is the other half of the job: keeping that price intact until you install.

Three things have changed in the last few weeks:

• Rates: the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.60% on 29 September 2026, its fourth increase this year
• Work pipeline: ABS building approvals are still strong but easing. The trend for total dwelling approvals fell 0.8% in August 2026, the first monthly trend fall since January 2025, although approvals are still 9.1% higher than a year earlier. Private house approvals (seasonally adjusted) were 10,885, the highest since August 2021.
• Labour: in a joint release on 3 September 2026, HIA and NECA warned that data centre construction is drawing electricians and specialist trades from the same limited pool as housing, which risks higher project costs and delays.

The result is a market with enough work that you cannot afford to under-price, and costs moving fast enough that a price struck today may be wrong by the time you install.

What is a rise and fall clause?

A rise and fall clause is a contract term that lets the contract price change to reflect actual increases in labour and material costs during the job. It is also called a fluctuation, price variation or cost escalation clause.

A few points worth knowing:

• Lump sum contracts fix the price, so without a clause you usually cannot recover cost increases that happen before the work is finished.
• These clauses generally allow increases only. They do not reduce the price when costs fall.
• There are two main types: one adjusts the price by the actual change in material or labour costs, and the other uses a formula written into the contract.
• They do not apply to provisional sums or prime cost items, because those are already adjusted to actual cost.
• The clause can apply for the whole contract, or only from a set point after signing or tender.

How does a rise and fall clause work on an electrical job?

You list the items that move, record their prices at tender, agree how labour increases are measured, and later claim the difference between those baselines and what you actually paid. In practice:

1. List the items that are likely to move. Think cable and other copper-heavy products, switchgear, and any item where your supplier pricing has been volatile.
2. Record the baseline price for each item at the tender date. Keep the supplier price list with the tender.
3. Agree the labour reference point. This is usually the rate increases under the relevant enterprise agreement or award (see our August post on FY27 labour costs).
4. State when the adjustment starts and how claims are made. Be specific about timing and paperwork.
5. Keep every invoice. A claim is the difference between the baseline and what you paid, so the paper trail is the claim.

Worked example (illustrative figures only, not Esti-mate data): take a lump sum tender with a 10% net margin.

• Tender price: $200,000
• Materials in the price: $60,000
• Labour in the price: $90,000
• Net margin (10%): $20,000
• Materials rise 4% before the job finishes: $2,400
• Labour rises 3% before the job finishes: $2,700
• Total unplanned cost: $5,100

That unplanned cost is about 25% of the margin, gone. With a well-drafted rise and fall clause covering both materials and labour, most or all of it could be claimed back. Without one, it is yours to wear.

How long should an electrical tender stay valid?

There is no single right answer. Match the validity period to how fast your costs move, and write an actual expiry date on the tender, not just a number of days.

Some practical rules:

• Do not let your tender outlast your supplier pricing. If your supplier only holds a price for a set period, your tender should not run longer.
• In a rising cost market, shorter validity protects you. If a client takes longer to award, re-confirm the price instead of letting the old number stand.
• State what happens after expiry: the price will be re-confirmed, and may change.

Which protection fits your tender?

Do rise and fall clauses apply to domestic work in my state?

It depends on the state. Master Electricians Australia sets out the position for domestic work as follows, but laws change, so confirm the current rules before you rely on them:

• Permitted: NSW, Queensland, Northern Territory, Tasmania and the ACT.
• South Australia: permitted if the contract specifies a completion period.
• Victoria: only for works over $500,000, and the contract must include a fair and reasonable estimate of the builder’s likely payment.
• Western Australia: prohibited for contracts below a set threshold, currently $500,000.

For commercial work, the contract you sign sets the terms, so read the pricing and variation clauses before you tender.

A clause that is poorly drafted can be found void for uncertainty, which could leave you stuck with the lump sum. Have it drafted or reviewed by a construction lawyer.

Checklist: how do I protect my next electrical tender from rising costs?

1. Refresh supplier pricing on the day you finalise the tender, not the day you started it
2. Put an expiry date on the tender, and check it against your supplier’s price validity
3. Ask whether the contract includes a rise and fall clause, and ask for one if it does not
4. List the materials and baseline prices if a clause is offered
5. Check labour rate increases that land before your install date
6. Check real crew availability against the start date, given the competition for electricians
7. Record your assumptions so any later claim is easy to justify

How does esti-mate electrical help?

Pricing protection is only as good as the numbers underneath it. Because your labour rates, material costs and margins live in one place in esti-mate electrical, updating a price before you submit does not mean rebuilding the tender from scratch. Count-UP digital take-off keeps your quantities accurate, and the Overlay Feature helps you track variations and RFIs so extra work is captured and priced.

What is a rise and fall clause in an electrical contract?
A rise and fall clause is a term that lets the contract price move with actual increases in labour and material costs during the job. It is also called a fluctuation or cost escalation clause. It usually allows increases only and does not reduce the price when costs fall.

Can an electrical contractor add a rise and fall clause to a lump sum tender?
A contractor can propose one, but the client has to agree to it, and state rules apply to domestic work. If the client will not accept a clause, shorten your tender validity or build an allowance into the price.

How long should an electrical tender be valid?
There is no set period. Choose one that matches how fast your supplier prices and labour costs move, and write an actual expiry date on the tender. When costs are rising, a shorter validity period protects your margin.

Does a rise and fall clause lower the price if costs fall?
Generally no. These clauses typically allow the price to increase only. If you want costs falling to benefit the client, that has to be written into the contract.

What should an electrical rise and fall materials list include?
Include the items most likely to move in price, such as cable and other copper-heavy products and switchgear, with the baseline price at the tender date and the supplier price list attached. For labour, state the reference point, such as enterprise agreement rate increases.

Not sure whether your tender is protected?

Get in touch with the esti-mate electrical team on 1300 948 586, or jump into Stephen’s Monthly Estimating Course to sharpen your tender pricing.

This article is general information only and is not legal advice. Have a construction lawyer review any contract clause before you rely on it.