The work has been undertaken and completed. The Contractor argues that as no rate exists in the Bill of Quantities, the compensation event should be based on the Contractor’s actual costs plus Fee.
What key clauses define how the compensation event should be assessed and is the Contractor correct?
Welcome to the community.
For a compensation event the work of which has already been done, you will have a new lump sum item added to the BoQ (see clause 63.15).
As regards the assessment, you would need to look at clause 63.1 and check where the timing of the work sits in relation to the dividing date; you would then allocate which part would fall under actual Defined Cost and forecast Defined Cost (for Defined Cost you use the Short Schedule of Cost Components*, clause 11.2 (23) refers) and then add the Fee.
For time impact, i.e. delay to the Completion Date or a Key Date, you would use clause 63.5.
The above is for general reference only; you might find other provisions applicable under core clause 63 (e.g. regarding rates, risk allowances, assumptions etc.) and any Z-clauses in your contract.
*NB. Components 11 and 24 have been amended by the NEC4 January 2023 amendments which you can download from the NEC website.
Thank you for your prompt reply. Cheers!!
No worries at all - take care.