Work is omitted from BOQ with PMI resulting in negative CE. Am I entitled to show my prelim element of the items within the BOQ that have been omitted.
Activity schedule rates or as in your case here bill of quantity rates are not used to assess the value of compensation events UNLESS by agreement (and I have to remind people that this means both Parties agreeing!). Therefore you assess the direct cost of not doing that work, and you do include any premlim cost that you will now not incur within the saving. However, any prelim cost that you will incur does not need to be given back as part of the saving.
Activity schedule rates and bill of quantity rates will not necessarily be reflective of actual costs (plus as you say it may include prelim type costs as well) so they are not used as the definitive basis of either positive or negative compensation events.