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NEC ECC: Costs for preparing quotations

+1 vote
Whilst recognising that the cost for preparing quotes for CE's will usually be included in Defined Cost (clause 62.1 Guidance Notes) and other comments made on this website, I have to question the true validity of this. Under and Option C, by way of an example, let's say the Employer is paying for full time PM, QS, Planning, risk/Project Controls, Engineers - basically a full time Contractor's Project team to deliver the Contract. That is part of the Contractor's Price and is therefore in his target price and those disciplines are there to manage the conditions of contract, plan the work, calculate the value of work, create EWN's, respond to them, generate compensation events AND formulate quotations. All of that is normal day to day duties of those FULL time disciplines, the cost of whom are already covered.

So, as is normal of a construction site, the weather turns foul and work is stopped because the conditions exceed those stipulated in the Contract and/or the Contract Data. The QS prepares his quote after the NCE has been issued requesting one, the PM checks he's happy with it and the planner will have done some work on this too establishing delay. This may be an hour or two for each individual to assess a day's delay or whatever the consequence is of the event. This cost is included in the quote.

1. Why should the cost of those people to prepare the quote be an extra cost and therefore be included in the quote?
2. Where is this "extra" cost if they are covered 100% of their time in the Target?

 Nevertheless this is exactly the same as preparing a valuation or requesting an instruction or dealing with an EWN; it's all day job and has been allowed for by the Tenderer through the need for these disciplines.

In reality you could extend this to any such event that requires a quotation.
asked Nov 7, 2017 in Compensation Events by APW (1,240 points)  

1 Answer

+2 votes
Best answer
As you rightly point out, it has to be an extra cost, so I am in agreement with you ... providing there is no extra cost.

If the Contractor has staffed the job reasonably, but there are then significant value or volume of compensation events that mean extra management resource is needed, then the Contractor has extra Defined Cost. For the valuation of a single large compensation event, this is due to "the effect of the compensation event", so should be reimbursed. For lots of smaller value ones, rather than arguing over how much extra resource should be assigned to each and every CE, it makes more sense to agree that, say an extra QS is needed for X weeks and a part-time planner.
answered Nov 7, 2017 by Jon Broome Panel Member (60,950 points)