NEC ECC: Option B - Clause 60.4 and BoQ to WI quantity difference

NEC3 and NEC4 Contracts Compensation Events
1

Using an example of the WI (drawing) showing 200m kerbing, but the BoQ only has 100m quantity and the rate to be £10/m…

If you dissect 60.4, in relation to the above

60.4

A difference between the final total quantity of work done and the quantity stated for an item in the Bill of Quantities is a compensation event if

  1. the difference does not result from a change to the Works Information,
  • (Which is what we have as no change to WI)
  1. the difference causes the Defined Cost per unit of quantity to change
  • (I dont suspect the quantity error would mean the rate per linear meter of kerb would change from what was stated in the BoQ)

And

  1. The rate in the Bill of Quantities for the item multiplied by the final total quantity of work done is more than 0.5% of the total of the Prices at the Contract Date.
  • (The final quantity x £10 = £2000)

Would I be correct in thinking that that for 60.4 to be invoked, i.e. for this quantification error in the BoQ to be a compensation event, all 3 points would need to be satisfied?

If yes, then in our example, this quantity error would not necessarily be considered a CE as it could be said that the error has not resulted in a change to the defined cost per unit of quantity (point 2) … I.e. the rate per linear meter of kerb would still be £10?

Is it this particular point that Contractors may use to say the BoQ is remeasureable? As the rate per unit of quantity may not necessarily change so it does not invoke 60.4 and this being considered a CE?

Also, would this also be the case if the WI had only 50m kerbing, but the boq had a quantity of 100m? How would 60.4 relate to this?

Any help greatly appreciated.

Thanks

1 Like
2

Because there is an “and” as opposed to an “or” between the bullet points, you are correct that all three have to be invoked.

When doing an estimating or compensation event course, I show how a Contractor can present an argument that for pretty much any change in quantity, the Defined Cost per unit of quantity changes. i.e. Bullet 2 can almost always be true if it is in the Contractor’s interests for it to be so … but because of the “and”, the other two bullets also have to apply for it to be a compensation event.

However, the same rate x QUANTITY is therefore re-measurable if it falls below the 0.5% threshold and that would also be true if the rate decreased.

3

Hi Jon
Thank you for responding and clarifying.

So using my example:

If the Contractor was happy to use the original BoQ rate for kerbing, and did not consider there to be a change to the defined cost per unit…

But the total quantity of work done >0.5%…

Then by the Contractor taking this stance, would ultimately mean 60.4 is not invoked, and would not be a CE.

So, the only way the Contractor can get paid is to remeasure the BoQ?

4

Yes, providing the PM is also satisfied that the Defined Cost per unit of quantity does not change.