NEC ECC Option B - makeup of lump sum BoQ items

NEC3 and NEC4 Contracts Payment
1

A contractor has a lump sum item in the BoQ for both mobilising and maintaining dredger plant during the course of a contract.

During a pre-contract negotiation prior to the commencement of the contract, the contractor requested an increase of the billed rate of the item to provide for additional mobilisation costs as the dredger plant had to be mobilised from a more distant location due to a delay (due to the negotiation) in awarding the contract. The dredger used is part of the contractor’s submission - essentially it is in the contractor’s design.

During the contract, the contractor changed the dredging plant (to a similar plant with the same performance) and mobilised it from the original location where he had intended to mobilise the plant from and which was originally priced for.

(1) We wish to determine if it is possible to recover from the contractor the increased mobilisation cost that was accepted pre-contract due to the post-contract change in the nominated dredger plant as a change in the contractor’s design. Is that possible under this form of contract?

(2) Other than for a CE under clause 63.13, can a lump sum price that forms a composite price for a number of the contractor’s cost items be adjusted during the contract?

2

For (1), there would probably have to be a change in the Works Information leading to a compensation event … I can’t think of any other alternative under the contract. The only other recourse would be to go down the misrepresentation route under contract law if you believe they deliberately (which is fraud & a criminal offence) or innocently (a civil transgression) misrepresented the situation to you.

For (2), the strict answer is ‘No’ except by agreement between the Parties i.e. Employer and Contractor, not the PM and Contractor and a supplementary agreement. However, under option B, lump sums are paid per proportion complete so there is nothing to stop the PM and Contractor breaking it down further to reflect the proportions for working purposes.