NEC ECC: Option A assessment of CE's

In relation to clause 63.1 and assessment based upon actual Defined Cost for work already done or a forecast of Defined Cost for work not yet done and the judgement in northern ireland housing executive v healthy buildings (ireland) limited.

If one is to use actual cost data does this override the use of the stated rates in the SSCC? Upon first reading of articles about this case I had taken it to mean, where actual data is available, this is to be used rather than a forecast but in terms of hours and resource rather than in lieu of the Defined Cost rates in the SSCC as 11.2 (22) but if the actual cost is demonstrable should this be used? For example, for a People cost, if the actual weekly cost varies from the People cost stated in the SSCC for the same role, should this be used? This is true to the contract ethos to put a Contractor back into the same position had the event not happened but is this the intent of the court’s judgement?

I think it is really important that people do not think this court case now means every CE will be assessed based on actual cost. This court case was for a unique contract, which specific Z clauses and a situation where neither party had followed the contractual rules for a very long period of time. In that situation the judge decided there was no choice but to look at actuals. That does not mean that every case that goes to court will now ignore the rules of the contract that should have been followed and just go actual cost.

Even actuals will be massively subjective. Yes you had ten operatives for ten days - but who is to say you needed that many and they were all productive.

My strong advise is follow the contract and avoid the lottery of ending up in court to see what happens.

It’s a Contractor who has referenced this case in a CE quotation. They have used “actual” costs for the People, the rates being greater than those in the SSCC. Funnily though they still quote CECA rates with the percentage uplift for the Equipment which, in my experience, are generally higher than those commercially available hire rates.