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NEC ECC - can terminal float be purchased from a Contractor for Target Cost agreement?

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The Employer instructs additional work before agreement of the Target Cost and asks the Contractor to provide an accelerated programme to retain the original Completion Date (the Contractor advises that the programme is increased by 14 weeks). The Contractor has provided this by increasing his hours on site, resources on site, i.e. increased site prelims and labour etc. and has increased his prelim (50%) to cover the cost of this but has also omitted his Terminal Float (originally 11.6 weeks) to achieve this Completion Date and has valued the Terminal Float at the accelerated/enhanced weekly prelim charge for the duration of his Terminal Float. Should the accelerated prelim not be the only additional cost?
asked Feb 26 in General by Elaine.niven (120 points)  

1 Answer

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Anything goes before the contract is signed!

If this is the Contractor's offer that they will increase the Prices (target) by X in order to maintain the original Completion Date and that is accepted/signed then that is the Target. There are no rules on how they should have assessed it - although assess it too high and they might just lose the job altogether. At this stage it kind of depends on who needs it most as to who will back down, and also how bothered the Contractor is about relationships as it will not go down well if the Client feels they have been backed into a corner right at the start!
answered Feb 26 by Glenn Hide (70,150 points)