I am looking for some advice on behalf of a PM colleague of mine. She has inherited a scheme from others and at Completion it has become apparent that the pain/gain shares in CD1 haven’t been completed.
My understanding is that as part of the tender, as required within the ITT, the winning Contractor submitted proposals for the pain/gain share range and percentage. However, this was never inserted in the sealed contract.
They have also submitted correspondence that suggests the previous PM agreed to change the range and percentage to a simple 50:50 regardless of range, although this is only an email communication between the Director and Commercial Manager at the Contractor confirming a verbal discussion that was had.
The question that I have been asked is whether the Employer needs to make a pain/gain payment given that CD1 is blank?
My personal view is that given the ITT requested Contractors suggest pain/gain ranges and shares and selected an Option C contract they should be aware of the need to pay pain/gain. As the values are blank in the Contract, I would go with the values submitted by the Contractor as Tender stage as the basis and advice that the communication regards 50:50 be ignored as it was not instructed formally by the PM.
Am I missing anything or would you agree? If they choose to not pay pain/gain share on the basis that the sealed contract is blank is it really an acceptable approach/view?
Any comments thoughts welcome.