The scope of works have changed on a NEC Short Contract. The Project Manager has compiled a bill of quantities and asked us as contractor to price the bill for remedial emergency structural works.
My query is, are we under any obligation to price the bill item for item, or as this will be dealt with as a CE and the works will be delivered by a specialist sub contractor, can I submit a sub contract lump sum cost +fee%.
Hi I’ll need to clarify your question before answering it, but assuming you are using the NEC3 engineering and construction short contract then:- you should have a contract that requires a Price List (which is similar BOQ). Normally this would be compiled by the Contractor but the Employer might suggest format at tender stage.
So let’s then cover off the fundamentals, The PL allows items with or without quantities. The Price List should be drawn up before the contract is signed but is used to both pay for work in the original scope and extra works and can be updated after the contract has been signed mutually.
For payment clause 11.2 (9) states “The Price for Work Done to Date is the total of the Price for each lump sum item in the Price List which the Contractor has completed and where a quantity is stated for an item in the Price List, an amount calculated by multiplying the quantity which the Contractor has completed by the rate.”
For valuing change clause 63.1 states “For a compensation event which only affects the quantities of work shown in the Price List, the change to the Prices is assessed by multiplying the changed quantities of work by the appropriate rates in the Price List.” Clause 63.2 covers CE not affecting quantities.
They both broadly say the same thing, if there is quantities its remeasured if it’s a lump sum it’s paid as a lump sum.
Clause 62.1 states “A quotation for a compensation event comprises proposed changes to the Prices or rates and any delay to the Completion Date assessed by the Contractor. The Contractor submits details of his assessment with each quotation.” These essentially allows the PL to be updated via a CE. These would be proposed by the Contractor.
Clause 62.5 allows the Employer to propose format of the quotes. It states “After discussing with the Contractor different ways of dealing with the compensation event which are practicable, the Employer may instruct the Contractor to submit alternative quotations for a compensation event.”
So, in short you are obliged under 62.5 to “submit alternative quotations for a compensation event” where instructed, but can also price it as a lump sum as well under 62.1.
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This is great, thanks. And yes it is an NEC3 Short Contract.