I have rephrased a previously asked question as appreciate it wasn’t easy to understand.
Contractor (1) under an Option A contract are late in delivery of their works (Completion Date was July 2019). Due to their lateness they are having to pay for the welfare & site management out of their own pockets as there has been no CE to increase the period for which we will pay for welfare & site management.
Contractor (2) were meant to come in and perform another scope of works upon Contractor (1) completion. As Contractor (1) were late we had to get Contractor (2) on site at the same time. In October 2019 we transferred the PC duties from Contractor (1) to Contractor (2) and thus relieving Contractor (1) of the cost of welfare and site management.
A PMI was issued to Contractor (1) to advise that Contractor (2) would take over the PC duties.
There is a difference in opinion as to whether or not the compensation event will have a value. The two stances are;
As Contractor (1) were incurring costs we should see a negative CE for the period between the PMI date and the planned completion date i.e. 3 months of welfare and site management costs.
As Contractor (1) were incurring costs at their own expenses the costs for the welfare and site management are not defined costs and therefore a negative quotation cannot be expected. If a negative quotation is required/assessed this would be double jeopardy as Contractor (1) would be incurring costs (that aren’t recoverable as not in the Total of the Prices) and then further value would be removed from the Total of the Prices.