We are currently on a Framework Agreement using an amended ECCC Op B and a schedule of cost components for People, Equipment etc to value change. At Tender stage it was agreed that for CE’s we would price the works using -100% fee percentages on the applied people & equipment rates in the schedule effectively only being paid for materials. A situation has arisen whereby a bill item for removing a stockpile of material has increased in quantity from what was in the BoQ and the PM has requested a CE under Cl 60.4 (rate in BoQ for item multiplied by final total…). We have requested that this be valued using the existing BoQ rate x increased quantity but the PM is stating that he doesn’t agree and wants to use Defined cost plus fee i.e. as all work done is by people & equipment, CE is zero after negative fee percentages applied.
We are disputing this but have been pointed to the fact that rates are only used if both PM & Contractor agree to do so. As the Contractor does not recover his actual cost using defined cost plus fee we think this goes against the fair and reasonable mantra of the NEC but again this could be a function of the Contract amendments (use of negative fee percentages). Thoughts?