Inclusion of Risk in a CE NEC4 Option A

Can I apply a risk % on a CE quotation on an NEC4 Option A contract, for a seemingly straight forward CE? If so, what would be the best approach?


There is nothing stopping you agreeing a % with the Project Manager however the general principle (clause 63.8) is that risk allowances should only be in included for matters which have a significant chance of occurring and are not compensation events.


In terms of approach I would recommend including some kind of narrative about what the risk % covers - a table with risk description, potential value, likelihood of occurrence / severity etc. Agree this with PM.

This should help stave off any perceptions that an un-supported risk % in a quote is just an attempt to artificially inflate the quote.

If it’s a pretty straight-forward CE as you say, then a risk allowance may not be necessary whatsoever and the PM is likely to challenge.

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Yes, Cl.63.8: states that “risk allowances” should be included in CE quotations. The allowances must be for events that have a significant chance of occurring and are not one of the contract listed Compensation Events.