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NEC ECC Option A - Inclusion of site vehicles within a CEQ
Can site vehicles be included within a Compensation Event Quotation?
The said vehicles are not used solely for transport (to and from the place of work) as they hold many of the operatives small tools and equipment. The vehicles are also used, but not as often, to collect materials throughout the working day.
Jul 7, 2016
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to answer this question.
Compensation Events are assessed as the effect on Defined Cost(CL63.1). Therefore the vehicles can be included in a compensation event quotation if they are Defined Cost, i.e. they satisfy the requirements of the Shorter Schedule of Cost Components.
The main requirements are:
Cost is incurred to Provide the Works
The Equipment is used within the Working Areas.
The relevant clauses to look at are:
Core Clause 11.2(13)-Definition of To Provide the Works
Option A Clause 11.2(20)-Definition of Defined Cost
Shorter Schedule of Cost Components: Main Introduction and Section 2(Equipment) Introduction.
Contract Data Part 2 will describe the Working Areas.
I hope this answers your question, but if not, please let me know and reply further.
Jul 7, 2016
I do not disagree with Mr Parkinson's response but it is not clear whether the site vehicles are required for a longer period as a result of the compensation event or not. If the compensation events is concurrent with other activities, and, the existing site vehicles do not have to be supplemented by additional site vehicles, I am not sure that additional payment for site vehicles would be justified.
Jul 8, 2016
Thanks for getting back to me.
You make a really good (and often overlooked) point.
It's addressed by core clause 63.1 and is explained further in the guidance notes.
Changes to the Prices are assessed as the EFFECT of the compensation event on the actual and forecast Defined Cost.(Switch date is the date of the PMI/CE notification).
So what you have to do is calculate the actual and forecast Defined Cost before the event and after the event. The difference between the two is the change to the Prices.
So, as you suggest, if there are no extra site vehicles needed then the Defined Cost for vehicles before and after the event will be the same and the change to the Prices will be zero.
Jul 11, 2016
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