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NEC ECC: Why choose NEC3 Option B for a public sector project

+1 vote
What are the benefit to opting to use NEC3 Option B over Option A for a public sector project?

It is difficult to see the benefits to the Employer....
asked Oct 2, 2017 in NEC3 General by JHMeeks  

1 Answer

+2 votes
Best answer
Like any option it should be used in the right situation. I see no reason why you would not want to use option B if the project lends itself to a B of Q type project. I suspect value for money is pretty important to an Employer in the public sector? If as an Employer the project is a scheme that is pretty well defined and you are able to list out the activities and approximate quantities, the Contractor will price that tender cheaper than they would an option A. If the B of Q worked out pretty accurately then the Contractor is paid in accordance with their rates and the Employer should have got the same quality for a cheaper price than if they had chosen option A. However, risks/omissions in the B of Q will be an Employer risk and treated as compensation events, so if the B of Q can not be produced very accurately then option A will give more Employer cost certainty (all be it for a higher tender price).

Alternatively you could consider one of the target cost options (C/D). Option B should only be used in the right circumstances where a reasonable bill of quantities can be ascertained from outset and for that reason I see much more use of option A rather than B. As an Employer you have to choose the right option that meets your objectives which will be a balance of risk and cost certainty.
answered Oct 2, 2017 by Glenn Hide (60,130 points)