Re Option E (Option C & D for CE quotes); How does the Employer ensure best price is secured for Equipment & Materials when more Fee can be earned by the Contractor the more expensively he purchases (or quotes in the case of CEs)?
As you move through the options (i.e. from A-E) as well as financial risk to the Employer is increasing, so is the level of management input required from the Employer. You have to be involved more in what they are doing and their decision processes along the way to make sure they are doing what you want/expect. You might want to introduce measures where you check/vet prices of certain elements or subcontracts to make sure you are getting value or what you are actually looking for.
Other than that your only other recourse to ensure value is to look at the reasons for Disallowed Costs to keep that Contractor on their toes. However - there are not that many standard ones that put the Contractor at much risk. (You could introduce extra ones at tender stage as a Z clause if you felt that was necessary). If you have introduced an acceptance procedure in Works Information that they have ignored then that would be a disallowed cost.
Also for Contractors costs derived from Defined Cost these have to be at open market rates or competitively tendered prices (52.1).