NEC ECC: Assessing Compensation Events - using lump sum rates

Clause 63.14 states:

If the Project Manager and the Contractor agree, rates and lump sums may be used to assess a compensation event.

If the CE is to delete a piece of work and there is a lump sum in the activity schedule then this is straightforward.

However, can a CE be assessed using partly lump sum and partly defined cost?

e.g. where the CE is for a piece of work to be deleted and replaced by another piece of work can the CE be assessed using the lump sum for the work to be deleted and Defined Cost for the additional piece of work?

The answer is yes it can - by agreement. If both Parties agree, you could use the activity schedule rate to omit the work, and then work out Defined Cost using Schedule of Cost Components for the new element of works.

Just to emphasise - if works are omitted and not replaced, it is not automatically the activity schedule rate that is used as the quotation saving. Only if both Parties agree will the activity schedule rate be used. If not, that is assessed from first principles as well. If the Contractor can prove they could have done the works cheaper than the activity schedule rate - then that is the saving not what the activity schedule amount was.