NEC ECC: CE Quotations - Prospective or Retrospective

On an NEC3 Option A contract - if an ‘event’/ or a number of ‘events’ happen a long time ago (in project terms), but were never quoted, what view should you take in terms of impact - forecast or actual (prospective or retrospective)?

My gut reaction is you should use actual data, (both Time and Cost), espcially when refering to Clause 63.1 - “Actual Data for work already done”.

Is this the best approach?

Firstly I ask if this event was notified at the time that it was a compensation event, otherwise the Contractor would be time-barred (unless it is one the Project Manager should have notified).

Assuming it passes the first test - then 63.1 in full says you assess the CE using:

  1. actual defined cost of the work already done,
  2. forecast defined cost of the work not yet done, plus
  3. the resulting fee.

Importantly it then goes on to say that the boundary between actual/forecast is either when the PM gave the instruction or for other events when the compensation event was notified. This means that a vast majority of CE’s should be based upon forecast cost (back at the point it was ascertained it was one) rather than actual.

I do get here it would seem logical you use actual cost, but that is not what the contract says. That is for good reason as well - as if I feel the Contractor’s actual cost was more than it should have been, then I can still base it upon a forecast as to what I think it should have been.