Compensation Event - Omits for existing scope

NEC3 and NEC4 Contracts Payment
1

Under an NEC4 Option A contract a Compensation Event has been raised which totally changes the specification of the roof on the project.

In order to assess all of the roof works in the original scope is to be omitted and the newly specified roof added.

The original scope roof was however significantly under priced at tender stage, circa £100k, but would however have cost circa £200k to build.

When assessing the omit against the CE, should the £100k, which is what was included in the Activity Schedule for this element of Scope be omitted?

Or, on the basis that CE’s are assessed on forecast defined costs (and that the work has not yet been undertaken), do you omit what you forecast the original scope roof would have cost to build, in this case, the £200k

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2

Good question Rob, @Barry_Trebes @chriscorr @Neil_Earnshaw thoughts?

3

@Robert_Trembath rates and prices are only used to assess compensation events by agreement, presumably you wouldn’t want to agree to it as it’s not in your commercial interest to do so therefore the assessment (add and omit) is carried out using Defined Cost.

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