PM makes an assumption about something (eg level of foundation) and turns out his assumption was wrong (level of foundation needed to go deeper), How would Option C deal with this in terms of time and money?
Assuming this assumption was for a compensation event, if it turned out to be different then this difference can be assessed as a new compensation event. This in turn under option C would increase or decrease the target accordingly.
The idea of a PM assumption is to base the quote on that information and then that element can be revisited by either Party if it turns out to be incorrect. It means the initial CE quote will not be as high as the Contractor is pricing less risk, but does mean the Employer still has the additional risk of paying more if the actual is worse than the assumption was.
Contractor is paid actual Defined Cost they have incurred no matter what- what we are talking about here is the adjustment of the target.