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NEC3 PSC Compensation Events

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Clause 65.2 of the NEC3 PSC Option E states:

'The assessment of a compensation event is not revised if a forecast upon
which it is based is shown by later recorded information to have been wrong'

Does this mean once a CE is implemented that is how it is valued? I.e the Implemented value is paid rather than the time charge value.

Option E is time charge for 'time properly spent'.

It seems obscure than once a CE is agreed for a certain price the actual cost liable to the employer can be higher than the implemented value.
asked Jan 28 in NEC3 and NEC4 Contracts by sammyb (120 points)  

1 Answer

+1 vote
Under an option E contract, the Prices is effectively a forecasting estimate of no contractual significance in terms of what the Contractor or Consultant gets paid.

Consequently, a quotation with a forecast change to the Prices is just that : a forecast. If however, it turns out to be wrong then it makes sense to revise the forecast out turn of the whole contract.

So, I am not sure if I would describe it as 'obscure', but you do need to stand back from the specific contract provisions to make sense of it !
answered Jan 29 by Jon Broome (52,410 points)