Considering allowances made in previous CE's when assessing new CE's

A PMI was raised on a scheme, Option A Design and Build Contract, for design and construction of footway depths across the whole scheme, and a CE was implemented which included provisions for kerbs, clearly split out into zones and a take off was provided clearly showing the number allowed for and gang build up and duration. However, the PMI did not clearly state kerbs were required however, these were allowed for in the quotation and implemented by the Project Manager. The scheme drawings were not updated following this PMI.

The kerbs and footway have been redesigned following a new PMI for different construction, and the contractor is pricing the full scope without taking into consideration the allowance made within the previous CE. They are using the last accepted drawings and original WI, which do not reflect the change of the previous implemented CE (There was no instruction to replace the kerbs but they had allowed for it in the previous CE).

When assessing the new CE for the new footway, should the kerbs allowed for in the previous CE be deducted and replaced with the new requirements? Or as this was not specified in the previous PMI should this be priced in its entireity with no deduction?

Hi AdamJohn, welcome to the community.

The principle for the financial assessment of a compensation event is to assess the change in Defined Cost + Fee due to the compensation event. Therefore when assessing the “new CE” the assessment should be based on the change in Works Information. What may or may not have been included in previous quotations is irrelevant. It is also worth noting clause 65.2 NEC3 / clause 66.3 NEC4 which concern the finality of an implemented assessment.

What is unclear from your question is why the Contractor thought kerbs would be required for the original CE. If, despite the PMI not stating so, they would have been required then the Defined Cost + Fee would need to be considered (prior to the “new CE”).

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Thank you for this David,

The kerbs were allowed for as the CE was for the reconstruction of the footway, the contractor stated in it’s assumptions, which was accepted by the Project Manager, that kerbs were allowed for as some may be damaged during the construction of the new footway and would therefore require replacing. Would an accepted assumption from the contract manager change the work information?

Thank you



Hi, it appears that it was a Contractor’s pricing assumption rather than a Project Manager’s assumption (clause 61.6). A Project Manager’s assumption does not necessarily change the Works Information but it does allow for that element of an implemented CE to be assessed if the assumption proves to have been incorrect eg PM assumption that X will be provided by 20th June but X not provided until 30th June would allow an assessment of the consequence of being provided late.

Regarding the initial question, if the Contractor considered there would be a cost for kerbs to provide the detail that has now been changed then that cost should be consider against the cost to provide the new detail. Hope that makes sense.

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