NEC Defined Cost / dividing date

A Contractor, in a selective fashion, is trying use as built records to assess a correctly Forecasted Compensation Event (no works undertaken at the dividing date).

What are your thoughts on this? If the Contractor waits until the works are completed (if possible) & requests a revised quotation, should the Defined Cost be used in lieu of forecasted? The dividing date doesn’t change but Northern Ireland Housing Executive v Healthy Buildings (Ireland) Ltd [2017] NIQB 43 advocates using the records available?

Whilst I don’t think the above is acceptable or correct, it would, in theory put the Subcontractor back in the same position (providing the Defined Cost has been accurately recorded, records, records, records!).

If the Subcontractor has notified the CE in a timely manner and it has been accepted by the Contractor, with a corresponding quotation also submitted in a timely manner, then the Contractor should instruct the submission of a revised quotation only after explaining the reasons for doing so (see clause 62.4). The instruction for a revised quotation assessment does not change the ‘dividing date’ (NEC3 2013), unlike the position under NEC3 2005, where the ‘switch date’ effectively moved with a subsequent instruction.

Unless the Subcontractor has incorrectly assessed the quotation in some way, then they could simply re-submit the previous quotation. The ‘reasons’ that the Contractor states at clause 62.4 should relate to the Subcontractor not assessing the matter correctly (in accordance with the contract procedure), or provides the Contractor with an opportunity to alter any assumptions made. The Contractor could not make an assumption, however, as to how the quotation is to be assessed that is contrary to what the contract procedure provides, as this would require a contract variation.

To my mind the most important lesson from the ‘Healthy Buildings’ case is that you should ‘do what the contract says’ even if the other party doesn’t, as, in this case, neither party had correctly followed the CE procedure, hence the reasoning to apply ‘compensatory principles’.