NEC ECC: Option B subcontract valuing a CE for work omitted by changed Works Information

Changed works-information has resulted in the omission of approximately 10% of the scope of piling works under an NEC3 Option B subcontract.

11.2(28) defines PWDD as the quantity of work which the subcontractor has completed multiplied by the rate. Each piled base in the bill has it’s own bill items and five piled bases have been omitted before the work on them commenced.
62.2 states that quotations comprise a change to the prices (delay will not be relevant due to omitted rather than additional work).

63.10 is Option B specific and allows the prices to be reduced and 63.13 of Option B requires assessment for changed prices to be in the form of changes to the bill, stating that the changes are changes to rates, quantities or lump sums. The Guidance Note for 63.13 states that the bill will require amendment in the form of deletion, addition or revision of quantities or items or rates and lump sums.

Based upon the above, once work is deleted by changed WI, the subcontractor will not complete the work, thus excluding it from inclusion in the PWDD and the bill is amended by deletion of the relevant bases pursuant to 63.13, how is the CE to be priced, or is that the conclusion of the process?

The compensation event quotation should reflect the change in Defined Cost + fee of the event.

The Contractor and Subcontractor can agree to use bill rates to assess the change, in which case the 5 deleted piles would be amended to 0 quantity and an item introduced for the aggregate of the bill value (negative).

If not using Bill rates, the approach I would take is to

establish the BoQ value of the piles which have been deleted.
I would then assess the change in Defined Cost + Fee due to the deletion mindful that materials may already have been delivered etc.
The CV value is the addition of the two; I would note on the CE quotation that the deleted piles would not be included in the PWDD, or would be 0 quantity.
I would then introduce an item in the BoQ for the CE.

Thanks for the answer. Difficulty I see is bringing the BoQ value into the assessment. Normal approach would be - What was the forecast defined cost of the work going to be without the event, compared to what will the forecast defined cost be because of this event? Then it’s easy to declare the difference between these two as the effect upon forecast defined cost. Problem here is that this calculation does not work as the forecast cost because of the event is now zero (nothing has been purchased in advance).

I agree that the approach is to establish the change in Defined Cost + Fee due to the event itself. To do that totally you would have to assess the Defined Cost + fee of the whole work without the event (100% piles) and then the whole work including the event (90% piles) which would seem a bit of an overkill. That would establish the change and you would have to calculate the value that would have been generated by the BoQ had the change not occurred. The 2 added together being effectively the PWDD.