If a Contractor includes an activity in a target price (option c) but then when coming to review the ‘final account’ and the work wasn’t required in the end, is the target price adjusted (i.e negative CE) to remove it out, or is it viewed as the Contractors ‘win’?
1 Like
The Prices are never reduced unless for a given reason stated in the contract. If the Project Manager instructed works not to be done (and hence a change to the Works Information) then that would be a CE and that would adjust the Prices (i.e. Target under option C). The fact here that the Contractor happened to allow an amount in their Target that was not necessary - that will be the Contractors benefit (but only to the percentage that they get in terms of pain/gain share). You could argue it is both Parties win!
Also think of it the other way (which I always find useful to balance whether a clause/principle is “fair”). Had the Contractor missed out an item in their Target - I doubt very much the Employer would agree to increase the Target to compensate for the Contractors over site!
Just to add a bit of detail / clarification on top of Glenn’s answer.
You say that the Contractor had an activity in their activity schedule which they didn’t do and in answering your question I agree with Glenn : there is no compensation event for taking an activity out of the activity schedule and quite rightly too.
The answer would be different if the Contractor had also not done corresponding work which was stated in the Works Information. If that was the case, then the Project Manager could change the Works Information to take out the work - which is one of only two core clause CEs which can reduce the Prices - thus effectively taking the activity out of the activity schedule and reducing the target Prices…