We are claiming for costs which are not included in the SSCC as completed in the final contract (NEC4 Option B) as part of a compensation event
In assessing the compensation event, the PM believes that he is entitled to assess the event removing any items not scheduled in the SSCC. Is the PM correct?
Surely if the contract allows for additional works (outside of the original scope to be instructed) there must be a mechanism for claiming for plant and equipment not in the original SSCC as this could not have been foreseen.
Further background - we quoted the CE and included these additional cost items in our quotation.
Please provide more information to be able to correctly answer this question. What is being applied for? and what does the PM believe should not be included?
“new plant & equipment” can be claimed under the SSCC, under “2. Equipment: 27” - “Amounts for equipment which is neither in the published list stated in the contract data nor listed in the Contract Data”. This allows new equipment to be costed for CE’s.
Costs need to fall under one of the eight titles in the SSCC (People, Equipment, Plant & Materials, Subcontractors, Charges, Manufacture & Fabrication, Design & Insurance). If a cost does not fall under one of these titles, then it’s deemed to be part of the direct fee percentage (Cl.52.1). If the PM follows this approach they are correct.
What is being applied for:
Specifically this would be an excavator and other plant on day rates which have been costed and justified as directly attributable to the compensation event (the PM is in agreement with this principle)
What does the PM should not be included:
The same - the plant and equipment which he agrees is attributable to the compensation event. He believes it should not be included on the basis of it not being included in the SSCC
Well that’s a bit confusing. The PM is wrong, the new “equipment” is justified for the additional works, and falls under “Title 2” in the Short Schedule of Cost Components. I’m not sure I follow the PM’s logic on this… it appears to be they want additional work carried out, but don’t want to pay for the plant/equipment to complete the work? As long as you can demonstrate the “day rates” are open market rates with all discounts passed on to the project, then this is a legitimate cost. Your costs sound legitimate, they fall within the SSCC and the PM must pay them.
I think the confusion may be arising from the phrase you use and can often find when research “fall within the SSCC”. The PM has taken this to mean that we should have provided all the rates for all the possible equipment at the point of signing the contract. The PM believes not having done so means we cannot claim for it but clearly we cannot anticipate an instruction to increase our scope. However it seems items do “fall within the SSCC” if they are legitimate.
Right I follow. The PM is most definitely wrong on this one. In Contract Data Part 2 the Contractor “may” add in day rates for equipment, there is no requirement for them to add them. Plenty of contracts have this section blank, so the PM’s logic would fall at the first hurdle in that instance. Contractor may put “rates & lump sums” into CD 2: for ease of assessing costs of future additional works (CE’s). No contractor can possibly 100% accurately predict all the equipment required to complete a job, jobs often change with additional requirements/works as they progress. For the PM to claim it’s not listed in CD.2 and therefore not allowed is nonsense. If they follow that approach most Contractors will refuse to undertake additional works. The answer remains as above: SSCC Title 2: 27 Equipment. Ask the PM to reread this part of the SSCC.
Really helpful, thanks for your input