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NEC ECC: Option A Pricing Risk

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When Pricing works after they have been instructed and completed upon defined cost am i allowed a reasonable amount for risk even though it has not occurred?
asked Nov 30, 2017 in NEC3 Compensation Events by Pete.conway (290 points)  

1 Answer

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Clause 63.1 defines the point in time which separates actual and forecast Defined Cost in a CE quotation assessment.  Having said this, however, I personally believe that it is the point in time when the quotation assessment is actually made that, in reality, separates the two.  This is because a forecast is essentially the prediction of an outcome, in this case Defined Cost.  If you know what the actual Defined Cost is, then your forecast should be a very accurate assessment.

A risk allowance relates to a forecast component of an assessment, that is it has a 'significant chance of occurring' which means that it has not actually occurred.  Having said this, there may be residual risks which continue after the event, such as disruption, or the profile of a risk may have altered due to the CE, for example subsequent external works now programmed for winter rather than summer.  In this instance you would be entitled to include an assessment of these in your quotation, where they are due to the CE.
answered Dec 1, 2017 by Andrew WI (11,830 points)