Assessment of Compensation Event by Subcontract

Hi, I am working on NEC3 Option C contract

We had issued a PMI and CE to carry out 15 nos. of plate load test which was required to be tendered. The 15 nos. of plate load test would be carried out in different periods, actually base on the progress/programme of the works.

According to SMM, an item of “establishment” (unit is item) is required to be provided for testing plant in the bills of quantities.

After tendering, the lowest tenderer had priced the “establishment” with amount of $20,000 and the tender price is $300,000. The second lowest tenderer had priced the “establishment” by “included” and the tender price is $350,000. Finally, the lowest tenderer awarded the subcontract.

During the construction, the Subcontractor claimed that there is no programme provided in the subcontract/tender documents, as such he only allows 1 time of mobilization for the “establishment” of testing plant. The Subcontractor has claimed additional 14 times of “establishment” i.e. $280,000, 14 x $20,000. As a PM, we consider the Subcontractor is entitled the additional 14 times of “establishment”. It was found that the total price of the lowest tender would be increased to $580,000 ($300,000 + $280,000) which is much higher than the second lowest tender price of $350,000

How do we assess the CE for the Contractor?
The additional 14 times of “establishment” ($280,000) is not Disallowed Cost, the Contractor is allowed to be paid. If we include the amount of $280,000 in the assessment of CE, it seems not fair to the Employer.
If we assess the CE by considering the second lowest tender price, it is obviously no contractual basis.

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I’m not sure of the relevance of the SMM / bills of quantities as you mention that the contract is NEC3 ECC Option C, is the subcontract based on NEC3 ECS Option B or D?

Regardless as to this the key here is the Works Information in terms of what does it require the Subcontractor to do? Does it contain constraints that explain to them that the works cannot be performed in a single operation?

Need more information to be able to answer more fully.