We are on an NEC4 option A and have been issued numerous CEs which we have quoted for. We have included management staff (QS, Project Manager, Engineer etc.) in the CEs as a defined cost as detailed in the SSOC.
The Client’s PM has stated that we need to demonstrate that any staff cost is over and above our tender allowance thereby opening up all of our tender build ups. The comment being that our staff would be on site anyway and if there is no prolongation (which there isn’t) there is no additional management cost associated with the CEs. This includes the cost of preparing the quotations - the argument being that the QS is on site anyway.
Is this a legitimate statement?
My point is that without the CEs our management costs may be less/staff could be released from the project earlier irrespective of our tender allowances.
I’ve been on both side of the fence with this argument… its a difficult one, as the tender allowance / build up is irrelevant and the contractor is under no obligation to open it up to the PM, especially under an Option A.
I would think the PM is correct in that you will need to be able to justify that the CE have had an impact on your defined costs pertaining to management prelims: additional site works doesn’t automatically give rise to additional site management time as such.
can you demonstrate it through a resource loaded programme or prove your resources aren’t either 100% allocated to the project or being utilised up to 100% of their time?
but i can also sympathise with the PM here - if the contractors say site manager is already on site 100% of the time, and a say a civils team is picking up additional scope but there’s no impact on the programme… then what could the increase be to the defined costs of said Contractors Site Manager?
is over time, weekend working or additional resources required to fit in the additional/ CE works?
or is there a disruption to the programme? where by say the civils works will now take longer delaying say the mobilisation of the electrical team but overall there is no impact to key dates/completion date? could argue that you now need more civils management when you should have been moving onto electrical works…
maybe input it all into the programme and look for an angle of inefficient working or something along those lines.
the PM is also correct that the time/cost associated with preparing the quotation and project for the CE quotation is not recoverable as part of the CE costs. expect for where its a proposed instruction that isn’t implemented.
good luck!