Hi Glen, thanks for your answer and appreciate the use of a CE being priced as a defined cost. What if there are so many variations / CE’s due to the underground conditions the contractor asked that his BOQ rates be re-priced as he is not getting the productivity he envisaged due to the stop start nature. Is he entitled to ask for the contract then to be re-price as a defined cost / cost reimbursable format?
The contract is scheduled for 2 years minimum. We know that the site is full of services, obstructions, poor records, contamination etc… We are asking the contractor to price a BOQ on the basis of the existing services only. As soon as he encounters the variations admittedly he is going to raise CE’s but there must become a point where he states that his BOQ rates are non productive in comparison to what he is acheiving on site due to the stop start nature. This surely cannot be assessed in a CE, it must have a continuous knock on effect, or am I being over cautious?
A compensation event is used to assess the impact of anything that impacts the contract works as tendered. The BofQ rates in your description would only be seem to be valid where they get a clear run at things. If they are continually hitting unforeseen services then each of these would be assessed as a compensation event. That will include the slowing down of the original contract works and any effects on non-productive working etc. There is no-where in the contract that allows the Contractor to re-rate their original item, but the effects where there is a change can be fully assessed within a compensation event.
You would still have the BofQ rates to claim the original contract work done, but the associated compensation event will pick up all of the additional cost that was not the Contractor’s risk to have priced for in the first place.
That is why some Clients would choose option E in this situation where there are so many services that very little of the original contract works are expected to be done without numerous issues. However, you have to work within the option that has been chosen here and follow the rules the best you can.