NEC ECC: What is required for the demonstration of CE effect upon Defined Cost under an Option A Subcontract ?

NEC3 and NEC4 Contracts Time
1

In relation to a compensation event under as subcontract option A being claimed as part of defined cost for the main contractor under Option C under clause 63.1 the changes to the Prices for a CE under the subcontract are assessed as the effect of the compensation event upon;
. the actual Defined Cost of the work already done,
. the forecast Defined Cost of the work not yet done and
. the resulting Fee.

A CEN has issued by the Subcontractor and accepted as a CE for an some free issue materials not being available to the subcontractor when required causing half a day of resources stood. A record was issued and signed at the time showing the resources stood. We (the contractor) have assessed the event as per the actual defined cost of the work already done based upon the agreed record of standing resources.

The Project Manager under the main contract (Option C) is requesting that as part of our substantiation for the Subcontract costs we must demonstrate the effect of the event for that task on the Defined Cost i.e. a forecast of Defined Cost prior to the event and a forecast of Defined Cost post the event - is this work required?

2

If you do the maths on what the PM is asking for, he or she is asking for the change in Defined Costs (the difference between forecast before and after the CE). i.e “the effect of the compensation event on … Defined Costs” as per clause 63.1.

You don’t necessarily need to calculate the before and after to get that especially as, in this simple case, the effect is the Subcontractor could not work for half a day, so had resources standing.