NEC ECC: Compensation events and Project Manager assumptions

NEC3 and NEC4 Contracts Compensation Events
1

Ourselves (the client) have notified the D&B contractor of a CE 60.1 (change of works information) e.g: we have provided a brief scope, requesting for a range of additional works in a unit, more stud walls, mezzanine, m&e works. I understand and feel it is fair that the Contractor can provide a few assumptions before the design is progressed, as we have not provided detailed design.
Therefore once they submit the Compensation event (quotation), with assumptions clearly stated in the quote, of which we agree too, if the cost of the assumption is to change, I the Project Manager can correct/amend the CE e.g: the contractor and I assumed the m&e works would be £25k, but is actually £30k on completion, I can amend the CE correctly to £30k.

So I presume the contractor has a few options before submitting quote, don’t price the M&e, and treat as a separate CE later on or make an assumption alongside the Client PM?

Thank you

2

The contract actually only has Project Manager assumptions, which if turn out to be incorrect can then be revisited as a new compensation event. Contractor assumptions that are accepted within a quote do NOT instantly become Project Manager assumptions. Therefore the Contractor should either price the risk of anything that is not clear (which means you will get a more expensive quote) or they can propose the assumptions for the Project Manager to agree, and if they confirm in writing before the quote is submitted then these ARE now Project Manager assumptions under clause 61.6 that can then be re-visited.

Just to be clear, if you agreed the original CE at £25k and then an assumption turned out to be incorrect, you do not the amend the original CE up to £30k, you just assess a new CE for the change to assumption which on its own would be £5k (clause 60.1(17)).

3

Thank you Glenn. That defines it in more detail for us.