NEC3 ECC Assumptions made within tender price


The main contractor required a particular type of steel for the reinforced cages that were being built, however they did not state any further specification aside from it having to be GFRP (glass fibre reinforced polymer).

The subcontractor assumed a lower grade of this material, which only gave it a 60 year life span, within their tender submission. However there is no clarification / assumption within the WI - in fact there is no mention of this specification or any specification within the WI.

The tendered price was accepted. During design meetings, the main contractor provided a steel specification document stating that in fact the GFRP had to be of a higher grade (120 year life span).

This is new / additional information to the WI but not necessarily new scope (as the subcontractor was always down to use this material). However can the subcontractor refer to clause 60.1 (1) as isn’t the WI being changed by this additional specification being added in? Or is it that as it was assumed at time of tender, now that the actual specification has been provided, it’s a matter of recovering the defined costs but not a change in the Total of the Prices? Because if it was the other way around e.g. the higher grade of GFRP had been assumed but the lower grade was actually required, would the subcontractor then be required to generate a negative CE reducing the Total of the Prices?

This is based on an NEC 3 Option C.

Your assistance on this matter would be greatly appreciated.

If the Works Information does not clearly state what is required, then the Subcontractor would have been entitled to make a reasonable assumption and base their tender price upon this as their offer, which it seems the Contractor has accepted.

The introduction of a specification document would be a change to the Works Information under clause 60.1 (1), simply because the specification document would change the ‘content’ of the Works Information, therefore, it would be a compensation event. You would need to ensure, however, that this is formally instructed before you comply with any requirements, or in the absence of an instruction you could notify the matter as a compensation event and await the response, otherwise you could be proceeding ‘at risk’.

Any quotation for a compensation event is assessed as the effect on the Prices. This means that you assess the Defined Cost of complying with the new requirement less the Defined Cost of complying with the existing requirement, plus the Fee (including any possible ‘time’ implications). The ‘existing’ would be assessed based on the 60 year life span with the ‘new’ assessed on the 120 year life span.

Thank you for responding to my query.

Unfortunately, the new specification has not been formally instructed, yet the subcontractor has procured the new material.

A lesson learnt.

How would this situation be assessed if the contract was under an NEC Short Contract. If a change to the works info occurs, and this results in a large scope being removed from the main works package, are we entitled to defined cost + fee, or as I’m being told by a PM,they wish to assess this as a simple change in the quantities from the price list, i.e change from 1 Nr to zero, thus, we lose profit and supervision that we had built into the rate we are losing out on.