The contract is Option A with the Contractor responsible for all the design. He has asked to change the specification of the drain pipes from clay to plastic. This is not a change to the Employers WI and therefore I do not believe is a CE. If therefore this is accepted by the PM, the Contractor keeps any saving - correct?
Can the PM say to the Contractor that the proposal will only be accepted if a saving is offered to the contract sum? If so, how is this saving realised if the change is not a CE?
Thanks in advance for any guidance.
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If this is Contractor design then yes this is an exception to a change to the Works Information being a compensation event as it has arisen from Contractor (60.1(1)).
However, I guess there is nothing to stop the Employer accepting that proposed change as it is down their discretion so it is not impossible that a bit of negotiation may follow. It would be a very awkward PM however that failed to accept a proposed change that makes the Contractors life easier to deliver what the works just because they do not like the fact the Contractor is benefiting from the saving. In this case you need to make the proposal clear that it benefits the Employer in other ways so there is something in it for them e.g. they will get their works finished earlier.
You are also correct - as how can you capture such a “deal” to change the total of the Prices if it is not a compensation event?
Glenn is right in everything he says including that the contract does not give the Project Manager to alter the contract Prices in these circumstances. Consequently, if the Prices are to be reduced - so the benefit is shared as otherwise what is the point for the Contractor - then it would need to be by a Supplementary Agreement between the Employer and Contractor - see clause 12.3.