Scene setting: Option C main contract with Option C key subcontracts, very high volumes of change, significant amounts of unimplemented CEs, significant programme effects, significant change on change (cost and time). The question: large volumes of CEs raised with works to proceed quotations to follow, contractor has in many cases failed to quote or provide sufficient information for a reasonable assessment. What is the best remedy or means of making reasonable assessments with minimal source data? The employers concern is that having made assessments the only remedy for the contractor if not content is ADR. Is there an elaboration on this mechanism within the guidance notes or is it best to make the most reasonable assessments possible and try to display this to the contractor within the assessment workings (and to the possible future adjudicator) whilst demonstrating a willingness to reopen assessments on receipt of tangible information if received? If so how would this work because once ‘assessed’ the CEs are ‘implemented’
It is always best to start off with the most reasonable assessment possible with as much explanation as to how and why that assessment has been made.
Where the extent of work is unclear or the impact the new work will have on existing work is not reasonably possible to determine the PM should consider the use of assumptions under Clause 61.6 remembering that the assumptions should be about the event not the outcomes. If these assumptions are incorrect then a new CE arises which can be quoted or assessed.
I personally would caution against the idea of re-opening assessments. The use of the assumption mechanism is a much better route through to deal with the problem you may be encountering.
What Rob has said I would totally agree with. I would add :
- as a target cost contract, you should be having access to the Contractor’s Defined Costs which can be used to assess CEs. I.e. while you might be having to making intelligent and informed guessestimates on limited knowledge about the effect of the CE on methods and resources, you should NOT be guessing at the cost of these resources.
- a similar theme to the breaking down of quotations by stating assumptions (as an input) is to break CEs down into bite sized pieces where you can make reasonable & justifiable assessments;
- also, by agreement, you can extent the timescales for submission if it means that more certainty will emerge, but please do not this as an excuse for slack project management !
My last point is that while the only stated contractual mechanism for re-visiting CEs is when an assumption changes, some lawyers - perhaps not Rob - say that there is an implied mechanism as clause 60.1(8) is CE if the PM changes a decision which has previously been communicated to the Contractor. Note that this CE only allows the target Prices to go up, not down. So if the Contractor can make a decent case that your assessment was not in accordance the clauses in 63 - note : not that the result was wrong, but the initial basis was wrong - and you as PM agree, then rather than having to go to adjudication, there is an implied term that you change your assessment.