NEC 4 Option B - Cost of producing quotes and delivering change

NEC3 and NEC4 Contracts
1

Under an NEC option B form of contract, is the Contractor entitled to recover the cost of preparing quotations for compensation events and the cost of managing and delivering compensation events?

If the costs are recoverable what tests need to be met? The understanding is that the costs are recoverable however, the Contractor would need to demonstrate the change in Defined Cost due to the changes. If correct, what information would be reasonably required?

Would the Contractor need to demonstrate that the level of resource, in terms of Staff, is over and above what would reasonably be required to deliver a project under Option B, value, complexity etc and/or what was allowed for in the Contractors original allowances, assuming they were reasonable.

Or would the Contractor need to demonstrate that staff had to work overtime to facilitate change? Or something else?

1 Like
2

You are correct, in principle the Contractor is entitled to the cost of preparing the quotation however they also need to demonstrate that their Defined Cost has changed. As you say this could be someone receiving an overtime payment or maybe if the extent of change was so great that they’d had to employ more staff to deal with it.

If the CE delays planned Completion then I would expect the quote to contain an element of prelims for the extended duration on the Site which would also cover staff time dealing with CEs.

1 Like