On a short form ECSC contract, our subcontractor has submitted a price list with 8 items on it for carrying out the scope. Each item has x price against each item. We have changed the WI resulting in one of the activities no longer being required but substituted for something else of a different scope/description. What is the process for changing the prices? Is the total of the prices managed like an equivalent option A contract where the activity simply gets removed and the monies reallocated to other activities and the change for the revised scope issued under a CE with the defined cost plus fee? The reason I ask is that i’m conscious that in theory, the Contractor gets paid for each completed activity, if an activity is removed, do the prices fall?
Under clause 63.1 of the ECSC, if a compensation event ONLY affects the quantities of work shown in the Price List, the Prices are changed by multiplying changed quantities by the rates in the Price List.
However, as a Contractor - if I wanted to - I would argue that this is not true as any rate has some allowance for time-related costs of being on-Site and fixed costs, be that setting up Site or just getting construction Equipment to Site.
Clause 63.2 operates in the same way as for 63.1 of the full ECC, so you should calculate the reduction in Defined Costs plus the relevant fees for the activity that is no longer required and then add back in the increase for the ‘something else’. The assessment takes the form of changes to the Price List - see 63.8.