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NEC3 ECC: Option B Contract – can a Contractor claim ‘Loss of Opportunity’ when spending time managing the change brought about by a CE?

0 votes
A Contractor claims that as the Works Information did not require the tenderers to include for any staff dealing with CE’s, they have not allowed for this within their tender sum.

They claim that any staff time spent dealing with the administration and management of a CE, (i.e. preparation of risk assessments, method statements, paying supplier’s etc), basically the operational delivery of the instructed change, should be included within the quotation for the CE.

The Contractor has staff in the Working Area full time for the duration of the Contract and has not increased its resource on site, but claims that there is a potential loss of ‘opportunity;’ if they were to spend time on CE’s, which they claim they didn’t envisage at the time of tender.

This applies to all CE’s and not due to quantity issued.

Is it reasonable that a contractor adopts this position and where in the contract does it allow them to claim this.
asked Jan 24, 2017 in NEC3 Compensation Events by spjg (120 points)  
I don't believe the Contractor would be entitled to recover any additional costs for staff required administer the contract correctly.

An experienced contractor one would assume would understand the need for staff levels to enable him to undertake the contract? Granted certain projects may involve more CE's but then surely a contractor would have a good idea of the potential likelihood of any contract having multiple CE's based on his experience?

If you reversed this scenario and said, on a contract which only had one CE throughout its duration, should the client be entitled to a saving in overhead/fee percentage as the contract required minimal administration? I would say definitely not and it is the contractors risk to include a fee percentages which provides a reasonable recovery on overheads etc in order to effectively administer the contract. This can not be altered once the contract is in place.

I also don't see anywhere in the contract that would allow you to recover additional overheads for dealing with CE's or any other contractual obligations.

Just my opinion anyway!

1 Answer

0 votes
If they can not prove that they have brought in additional resources to manage the level of compensation events then there is no where that they can claim for this as part of a compensation event quotation.
answered Mar 12, 2017 by Glenn Hide (33,750 points)