Do defined costs have to be actually paid out

Hi
Just wondering if the Reachback community can answer the following question,
when assessing a CE (NEC3 option B) that has not been implemented and the works have been completed, is the PM correct in his assertion that only actual paid out costs that are in the SSoCC can be included in his assessment?
For the record we have (foolishly) never included several high value CE’s in any of our updated programme submissions either, which make forecasting of works done and not done very hard to prove as some of the works have been completed for over 10 months.
There have been payments made against some of these but the PM is now looking at implementing all of the outstanding CE’s in the account and has stated that some of the previous payments will be reduced if we cannot provide evidence that we have actually paid out the sums contained in the build-up’s to on-account payments.

1 Like

Assuming the PM instructed the additional work = The PM is wrong. The “dividing date” would have been the date of issuing “Project Managers Instruction” to carry out the work. The Contractors quote is a lump sum forecast of Defined Cost. If it were a cost reimbursable contract (option C/D/E) then the PM would be paying only the actual Defined Cost of the work done, and the “target” (option C/D) would have been lifted by the fully implemented value. In your example (Option B) the PM must pay the full quoted amount upon implementation. The PM is also on shaky ground here! the quotes should have been implemented after 2 weeks of receipt.

1 Like