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Can the Project Manager make assumptions when assessing the effects of a compensation event?

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Can the Project Manager make assumptions when assessing the effects of a compensation event?

asked Oct 10, 2012 in Compensation Events by BuiltIntelligence (870 points)  

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Yes. If the Project Manager decides that the effects of a compensation event are too uncertain to be forecast reasonably, he states assumptions about the event in his instruction to the Contractor to submit quotations. Assessment of the event is based on these assumptions (see Clause 61.6).

Stating assumptions is a good way for the Project Manager to modify the amount of risk that the Contractor includes in his subsequent quotation. This could either be to limit the amount of risk legitametely added in or because the Project Manager and Contractor just cannot agree on the figure.

Do note that if an assumption is later found to be wrong, then it results in a subsequent compensation event. See the last sentence of clause 61.6 and clause 60.1 (17). 

answered Oct 10, 2012 by BuiltIntelligence (870 points)  
edited Oct 18, 2012 by Jon Broome