EEC3 option C. Can the PM disallow/adjust part of an agreed estimated forecast of cost to be incurred by a subcontractor for a CE (and following implementation of a CE under the Subcontract which included this forecast). The agreed price with the Subcontr

The answer is ‘Yes’ they can for one of the reasons listed in clause 11.2 (25).

However, without you giving any details of why the PM has disallowed the cost, I can only speculate (at length) on the validity of that disallowing. Given the circumstances, it does seem a little strange though.

Can you supply more details ? E.g. Has the PM given you details of why this is a disallowed cost ?

With option C if this event is indeed implemented (clause 65) then this will be the amount that the Target Price will be/has been adjusted by. If the quotation was implemented at £60k then the target cost increases by £60k

The Contractor is then paid Defined Cost + fee for this event. Any cost incurred as a result of this event providing it is valid within the schedule of cost components is then payable, whether that cost be £40k or £80k. If the Project Manager believes any part of the Defined Cost claimed is dis-allowable in accordance with the disallowed cost provisions (clause 11.2(25)) then they would have had to state the reasons why. If it is a valid reason to disallow then there is nothing you can do. If you believe the reason is not valid then you can initially try to reason with the Project Manager but ultimately you could take the matter to adjudication.

So as Jon highlighted you need to ascertain why it has been disallowed as to what you are going to do about it. The only good news at this stage is that the target cost should have gone up by the amount it was implemented at, and is not subject to challenge or adjustment (clause 65)