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Change to the Works Information

+1 vote
On an option C contract , we have received numerous drawings via PMI whereby the revision has been amended however the Project Manager has provided no indication of where the changes are on the drawings, this has subsequently resulted in additional time required by site staff to review the drawings and ascertain the changes. The Project Manager is also of the opinion that such change identification  forms part and parcel of the Contractor's everyday job and should not be included within our CE quotation nor should the time for preparing the quotation.
asked Jun 19, 2017 in NEC3 Compensation Events by David Roche (400 points)  

1 Answer

+1 vote
Firstly, under an option C contract, the Employer is paying for your Defined Costs plus Fee, so even if there is no adjustment to the target Prices, the cost of doing this is split by the pain / gain. You reviewing has got to be more time consuming than the designers identifying the changes they are making.

I know reverting back to "the spirit of mutual trust and co-operation" is seen as a back stop for a 'claim' / compensation event, but most commentaries talk about it meaning having 'due regard' for the other parties business i.e. not putting their interests before yours, but taking account of the effect of your actions on their business and doing what you can to minimise them without incurring substantial costs or significantly inconvenience yourself. This seems to fall within that category.

How about notifying the PM as an early warning of the above situation as it is costing both you Defined Cost and the Employer monies under the pain / gain  mechanism. You might also point out that, as an agent of the Employer, the PM - and hence the Employer -  is not acting in a spirit of mutual trust and co-operation which is a breach of contract and a compensation event under clause 60.1 (18). That would mean all  cost falls on them. Make it clear, you don't want it to be, you just want the changes highlighted.
answered Jun 19, 2017 by Jon Broome (25,800 points)  
Glenn prompted me to look again at this, not so much because he disagrees with what I said, but more because I left something out : If you were under an option A or B, the costs of preparing a quotation are expressly excluded. However, you are under an option C contract where there is not this express exclusion, so there is good argument for saying that the additional time spent, providing it translates into additional Defined Costs, in preparing the quotation is part of the quotation.
Although it may be our existing contract staff preparing the quotations it is in effect delaying the day to day running of the Project, whilst it may not seem as there is an increase in defined cost, it does however mean we have to work longer on the project. With regards to drawings it does not make sense to notify changes to the Project Manager contained within the drawings in a CE quotation for changes that have been made by the Project Manager.