NEC ECC: CE Option A, Contractor requesting CE under Option E?

We are currently in Contract under and Option A Contract and have issued a PMI requesting a quotation and implementation for additional works/change of scope. The contractor has responded requesting the additional works and corresponding CE be carried out under an Option E basis.

How is the best way to approach this?

Unfortunately for them that isn’t what the contract says. They are obliged to submit a quotation based on the principles of (forecast) Defined Cost although it is possible that you can use agreed rates, where appropriate, which does not seem to apply in this instance.

From what you have said it appears that there may be elements of risk and uncertainty associated with the additional instructed works. Perhaps you could discuss these with the Contractor and clarify what is required, maybe making PM’s assumptions where appropriate. Alternatively it may be possible to break the works down into ‘bite sized’ pieces, for example, instruct the design elements, followed by any enabling or temporary works followed by the main scope of works.

Where there are elements of uncertainty the Contractor may include appropriate risk allowances within the quotation (including programme assessment) which effectively provides the opportunity to ensure that you don’t lose out on a quotation assessment, so I am unsure why they would want to revert to ‘actual cost’ principles.