I have an NEC 3 (Option B) which due to an error in the Employers BofQ will see final quantities significantly reduced. Running alongside this we have not achieved our tender outputs and as such the planned completion date is very similar/later then the original Completion date, despite the large reduction in quants. If we were to value this as a CE, calculating the difference between the forecast Defined Costs of the larger and smaller quantities, would we be entitled to include the cost of the prolonged duration, even though it is mostly of our own making, or should the CE be calculated on the basis that the work was completed in line with the contract programme. Is the Employer entitled to a saving in prelims due to the reduced quantities despite the contract duration being the same if not longer?
The compensation event would be assessed based upon the actual impact of the event on your costs. So the reduction in work might result in a saving, but the consequence of that saving may also have a cost. You’d need to ask yourself if the significant reduction in quantities caused you to be inefficient such that the planned completion date did not change. If that is the case, then the assessment of the compensation event will include the cost of the inefficiency. If the delay was caused by you, then that remains your liability and you would not be able to include any costs arising from that in the assessment.