Hi. I have drawing changes and was wondering how the fee should be applied by the contractor?
Should the subcontractor
A) assess the new drawing, add the fee and then omit the previous priced works (In activity schedule or previous CE) OR
B) assess the new drawing, omit the previous priced works and add the fee to the extra over amount?
Any help would be appreciated
Compensation Events should be assessed using actual Defined Cost or forecast Defined Cost. So for example, if a drawing showed some items omitted, you would price the omission based on Defined Cost + Fee and the admission Defined Cost + Fee and that would be your change to the Prices .
I believe you’re asking whether you can use rates / lump sums which are in your Activity Schedule which you can do by agreement.
In your A / B options, both would work providing you had agreement with your Subcontractor to use the Activity Scheudle to assess the omission. You would need to consider how your Activity Schudle rates / lump sums are produced, do they include Fee ? Do they include items which you have not considered in your ‘add’, for example waste %.