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NEC4 ECC: CE quotation preparation

+1 vote
158 views
Can the Contractor on an ECC Option B NEC4 contract include within the CEQ’s, quotation preparation costs for several of its staff; when some of these people within the quotes are based onsite?
asked Aug 3 in Compensation Events by RAW1985 (790 points)  

2 Answers

+2 votes
 
Best answer
Under NEC3, I would say strictly speaking 'No' as the cost of preparing quotations was specifically excluded from Defined Costs  for options A & B.

Under NEC4, this exclusion has disappeared and I cannot find it elsewhere in the contract.

However, in accordance with clause 63.1, there does have to be a change in Defined Costs, so if the relevant people are salaried and just work a bit longer  to get the quotes out, but aren't paid anything extra, then there is no change in Defined Costs.
answered Aug 5 by Jon Broome Panel Member (60,470 points)  
selected Aug 15 by RAW1985
0 votes
I would say the Contractor’s defined cost of people, according to the time they have spent working on the preparation of quotations (which could extend to designers, planners, quantity surveyors, operational people or even HSE advisors) should be included as part of all quotations in NEC4, where their expertise and input is required to accurately forecast, from a practical perspective, what the effect on defined cost is due to the CE – which is often very complicated.

If the people involved in preparing the quotation would have otherwise been undertaking other work (i.e. doing their day to day job) which, as a result of spending time working on the preparation of the quotation, had to be postponed then there is a valid argument that there is an effect on defined cost because the planned duration or time that person was intended to spend on the project may have extended, even if planned completion may not have changed. So long as the Contractor can clearly demonstrate this, there is no reason why such costs cannot be recovered.

On larger projects it’s quite common to have people/teams dedicated solely to preparing quotations and clause 62 programmes and dealing with change control generally.
answered Aug 15 by philjbrady (1,200 points)  
Hi thanks both, on this instance the contractor has not clearly demonstrated this on their resubmissions instructed and another issue is the prolongation within their prelims in the quote also has these people covered so in my assessment of the quotes I feel they have double bubbled.