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When quoting for a Compensation Event arisen from an instruction to delete work, is the Contractor entitled to the costs associated with the Time Risk Allowance shown in the Accepted Programme?

0 votes
asked Nov 23, 2016 in NEC3 Compensation Events by Filip Chirila   2

2 Answers

+1 vote
The assessment of the CE should be, in simple terms, the difference between forecast Defined Cost + Fee had the event not occurred v the forecast Defined Cost + Fee including the CE.

Therefore if the deletion is removing risk (which would be included within the forecast Define Cost had the event not occurred) then the "cost" of that risk should be included in the negative quote. The deletion might however introduce risk(s) on other items which would need to be assessed.
answered Nov 24, 2016 by dave bates (5,450 points)  
0 votes
The basic principle behind compensation events is that the Contractor should be no better or worse off after the event than he was before. So simple answer is that if the risk has been avoided by deleting the work then he's not entitled to any cost or time associated with that risk. If he was he would be being paid for something which has not happened and would be in a better position than he was before.
answered Nov 24, 2016 by Neil Earnshaw (7,640 points)