NEC ECC: Option C Risk in CE quotes.

In Compensation Events can the contractor add a % of risk to there overall quotation and should this be paid by the client?

The quotation changes the Prices and does not mean the Contractor will be paid it.

The Contractor will, in simple terms, be paid the Price for Work Done to Date (Defined Cost + Fee).

The global difference between PWDD and the Prices will form the share calculation (see clause 53) where both parties share any cost overspend or savings.

In respect of a general % addition, my view is that this would depend upon the nature of the CE. Generally, the risk needs to be a realistic forecast and would therefore need to be detailed. However for minor changes it may be more appropriate to use, by agreement, a % to reduce the administration costs.

A fixed percentage for risk does not generally work. If you are installing a new pipe run - the risk will vary depending on if it is in shallow ground or deep ground, or being dug in summer or winter. Therefore risk should be taken on face value on each occasion. It will be subjective rather than definitive, but the Contractor will just have to justify as much as they can that the risk applied is sensible and realistic.