Implemented CE: Prelims

NEC3 - Main Option B: We have a large scope of additional works which will be instructed to the Contractor as a PMI. The Contractor carrying out the works has put forwards an impact programme of 32 weeks to complete the works, the quote contains a weekly prelim amount for management costs. Once we instruct the works the CE will become implemented, what happens if the Contractor completes the works earlier and invoices for the full 32 weeks ? Cl.65.2 does not allow us to revisit the implemented amount again. I’m thinking a way around this is to issue a set of Project Managers Assumptions with the PMI, the assumption being the works will take 32 weeks to complete, if they finish early the prelims can be adjusted down via a change CE (change to PM assumptions: Cl.60.1.(8)).

You certainly could state PM’s assumptions when instructing the Contractor to submit a revised quotation. I would, however, suggest that you consider what approach to risk you (or the Employer) want to take. Bear in mind that, if the Contractor does complete the works earlier than the 32 weeks, there would be another CE for a corrected assumption (Clause 60.1(17)) and the assessment of that may well result in a saving to the Employer.

Bear in mind, however, that if the Contractor does not complete the works within the 32 weeks, there would also be another CE for a corrected assumption under 60.1(17) and the assessment of that would be likely to result in an increased cost to the Employer. If you don’t state an assumption as to how long it will take, the Contractor has an incentive to complete as quickly as possible because they will save money, but with a stated assumption there is no such incentive - it could be argued that the Contractor is actually incentivised to take longer!

Only you can balance the risks, but you may consider it prudent to not state an assumption and explain to the Employer that if the Contractor completes earlier than 32 weeks, at least there will probably be a resultant saving in supervision costs.

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