NEC 4 Option B - Increased Costs

We have a situation where a sub-contract is let on an Option B with no X1 clause. The contract is delayed through no fault of the sub-contractor. Revised programmes have been issued as have EWNs & CEs
The scenario is that he is carrying out large repetitive items re-measurable under the BOQ.
Re the valuation process my understanding is that anything prior to his completion date is valued at BOQ rates, but once he has gone past that date he is entitled to revalue under the CE process and claim his increased cost of materials etc. within the CE as forecast or recorded defined cost. Is that correct?

Taking it further if an item was constructed 50% prior to the completion date and 50% after, would it be split 50/50 between BOQ rates and a CE?

Hi Paul,

Since X1 does not apply, any price increases would only be dealt within the CE mechanism, meaning that, in general, the Defined Cost would be based on current or forecasted costs (e.g. current or forecasted material prices), save for rates set out in Subcontract Data Part 2 for people and Equipment.

Based on the above, your logic is correct. You may wish to check a similar post below:

1 Like