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NEC3 ECC: Substantiation of a quotation for a CE under option A

+1 vote
290 views
Having submitted quotations for a Compensation Event which has occurred (i.e. valued retrospectively, not forecast), the Project Manager has asked us to provide further substantiation of the information we have provided, including internal company documentation.

I contend that he is not entitled to this information, but should instead make his own assessment of the information within the quotation from his own contemporary records (the Supervisor was on site at the time the event happened).

Contractually, I can see nothing which obliges us to provide such information, but would ask for a second opinion?
asked Mar 12, 2016 in NEC3 Compensation Events by anonymous  
   

1 Answer

+2 votes
Clause 62.2 middle sentence says that "The Contractor submits details of his assessment with each quotation" and a generic reason for rejecting any submission for acceptance is that "more information is needed in order to assess the Contractor’s submission fully." (see clause 13.4)

On the basis that the change in Defined Cost = additional use of resource (whether in time or extra resource) x Defined Cost, I think the PM is entitled to see records of time that resource was used in order to compare the effect of the CE on resource usage versus the pre-CE method and resource in the current Accepted Programme.
answered Mar 12, 2016 by Jon Broome (23,720 points)  
What of a very similar situation under Option A where the Contractor has (despite several requests and no assessment being undertaken by the PM) never provided any substantiation other than a high level calculation which in any event was a retrospective assessment in the first place. Some 6 months after the event the Contractor is now providing back-up (timesheets) he could have provided in the first place which was raised suspicion with the PM. Whilst this may substantiate labour hours claimed is it reasonable for the PM to request further evidence that costs were actually incurred (in the form of wage / payslips to validate the Contractor's claim even though the People Costs will be valued using rates from the Contract Data? My view is that, in order to assess this claim fully (as per Clause 62.2) the PM requires more information to make an assessment. If it is still not forthcoming, the PM makes an assessment based on the information provided. Or am I confused here?
My issue with these instances is that 63.1 oftern scuppers requests for timesheets as the date of the actual vs forecast split is the date of the CE or the instruction. If the instruction was done pre work, then there will be no timesheets as its an estimate of how much time someone will spend. Hindsight is a great way to assess CE's but is not part of the Contract.
As Jon states, 'the Contractor submits details of his assessment', with his quotation, which should demonstrate both the methodology and content of the quotation assessment, both for the actual and forecast parts.  The level of detail would depend upon what the CE is for and the value etc.

A forecast should not be a 'wild guess' but an intelligent and methodical process based upon the most appropriate of forecasting techniques for the quotation in question.  If this is not the case then the PM would have every right to make his own assessment under clause 64.