Whenever submitting CE Costs, the client always kicks back on Prelims saying that there is an element of Prelims included in the Lump Sum, and there should be no additional cost for the site team to mange and implement the CE as the site team would have been in site anyway. My argument is that the Prelims included in the original lump sum were to deal with the original Works Information, so we should be entitle to charge for time spent by Site Team to deal with CE.
Any thoughts on what the NEC 3 Option A stance is on this?
1 Like
I am afraid not. Rightly or wrongly (and you will no doubt think wrongly) a compensation event is about the extra over cost you will now incur. If there is no change to planned Completion, and the current site team can deal with the management of that CE then there are no additional prelim type costs to claim for under the contract.
I am pretty sure why you can come up with a moral point of view why that is not fair from the Contractor’s perspective, but equally if you could claim it for every event then that would not be fair from the Employers perspective (not that you will be so concerned about that!)
1 Like
Just to add to what Glenn has said, the assessment is based upon the additional Defined Cost to deliver the scope of works, consequent to the impact the compensation event has (had). It is unlikely that a single CE will affect the ‘prelim’ costs, including the Site team, but if that were, say, 200 CE’s then it is almost certain that it would.
The problem is that you don’t know how many CE’s, by number and value, that you will have on a project, until after the Defects Certificate is issued and all CE’s are then known. There are several possible ways to deal with this under the contract;
Request the PM to make an assumption that no further ‘Site team’ resources are required,
Add in a Risk Allowance based upon a considered forecast assumption of the total volume of CE’s and likely affect upon the ‘Site team’,
Raise an early warning and discuss this matter as a separate issue outside of the CE procedure, possibly with an action on the PM to review resource levels and instruct further resources as a change to the Works Information, where appropriate, although this requires a strong collaborative approach.
This is frequently a contentious issue but if you take discussions outside of the CE forum and produce sensible evidence and information to present your case then that may assist in resolving the matter.
1 Like
Glenn,
Presumably the same principle applies to target cost contracts?
Thanks
1 Like