I am a PM of a NEC4 Option B contract.
The Contractor found a discrepancy between contract dwg and Bill of quantity.
The granite stone thk. showed in contract dwg. is 50mm while stated 30mm.thk in bill of quantity (n.e. BQ rate: $1,000/m2). Therefore, I had instructed a CE under 60.6 for correct the bill of quantity.
In assessing such CE, i had omitted the defined cost of 30mm thk granite stone (n.e. $1,500/m2) and compensate with additional defined cost of 50mm thk granite stone (n.e. $2,000/m2), and the assessed cost of CE shall be in net additional of $500/m2.
But, some of my senior agrued that Option B is similar to Remeasurement contract, and i should compensate the Contractor with additional defined cost of 50mm thk granite stone only (n.e. $2,000/m2),and the assessed cost of CE shall be in net additional of $2,000/m2. Meanwhile, the cost of 30mm thk. granite stone would be re-measured as zero in qty at the end of contract.
I am very confused and which approach should be correct in principle? Thank you.
The 2nd approach is the correct one.
You have to omit the bill item for 30mm thick layer as that work isn’t being done at all.
Thank you so much for your reply.
but is that any clause to support with 2nd approach?
coz in my understanding, the assessment of CE should be based on defined cost, which is the actual cost of work at dividing date. If i compensated the Contractor with the cost of corrected 50mm thk. only, the risk of pricing in original BQ (i.e. pricing is unreasonable low in BQ rate) would be transfer from contractor to client after issued CE for correcting a inconsistency mistake. The Contractor do not required to bear their own pricing mistake.
Also, i think the 1st approach is quite similar to change of scope situation, i.e. assume the original BQ is 30mm and now changed to 50mm thk with no discrepancy exist, the assessment of CE would be also be omitting the defined cost of 30mm. thk and compensate with additional defined cost of 50mm thk granite stone even though the work isn’t being done at all.
@Mandy Szesze via ReachBack
On reflection, there are two compensation events – (a) the removal of the 30mm item and (b) the addition of a 50 mm item
My full response didn’t come through
You have to value each CE separately,
The omission as defined cost (likely to be a negative number) plus the fee (positive number)
The new 50mm is calculated as the defined cost plus the fee ( both positive numbers)
I don’t believe rolling the assessment of both changes I to one assignment is correct
Into one assessment not assignment