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NEC3 ECC option D - Compensation Events

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Can the PM reject a Compensation Event raised by the Contractor which should have been provided in the Target Cost by an experienced Contractor?
asked Oct 14, 2015 in Compensation Events by Elvin Cruz (480 points)  

1 Answer

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Best answer
Yes the PM can reject this CE if it is not one.

If a Contractor notifies a compensation event practically speaking then they should state why it is one - i.e. which one of the reasons within clause 60.1 makes it a compensation event. Firstly in this case I am not sure under which one the Contractor would be claiming, but it sounds more out of hope. What ever the reason they claim - under clause 61.4 the PM would respond with the statement that they do not believe it is one.

If it should have been in the target cost then it does not sound like it would be a reason that the Contractor can legitimately claim that it is a compensation event. No compensation event means the target will not be changed, and the cost of this item will then be shared under the pain/gain mechanism of option D (as equally this item will not be a disallowed cost).
answered Oct 14, 2015 by Glenn Hide Panel Member (81,330 points)