I have an Option B contract and the Contractor has started including time associated with raising the Early Warning notification and notify a Compensation Event within their quotation for the Compensation Event. I do not think this is correct but cannot find anything in the contract to support my view. Is my point of view right or should these cost be allowed?
Once it is and compensation event (clauses 60.1 to 60.6 under option B) and the ‘due process’ of the compensation event process has been gone through, then the central clause for assessing the change to Prices is 63.1.
It says the “The change in the Prices are assessed as the effect of the compensation event upon” … “Defined Cost” "and the resulting Fee’.
So what is the effect of the compensation event on the Contractor’s Defined Costs wrt notifying an an early warning ? Well firstly, it is probably not a CE at this point, so we don’t even need to consider the effect on Defined Costs. Secondly, what extra costs did the Contractor actually incur ? i.e. if they spend 5 minutes writing out the notification, but left at the same time as usual (or even later) but the QS wasn’t paid any more, then there is no effect on Defined Costs.
Ditto for notifying it as a CE.