NEC3 ECC Option A – Weather Risk in Compensation Event Quotations

When submitting quotations for compensation events that include Subcontracted works the Contractor is applying a percentage addition to the entire quotation (including subcontracted works) for ‘weather risk’.
If the subcontractor has not included a weather risk allowance within his subcontract quotation then this would presumably imply that the subcontractor does not consider that there is a significant chance of weather risk occurring.
Q1. Is the Contractor therefore allowed to add his own ‘weather risk’ to the cost of the subcontracted works (the format of the example quotation using the SSCC provided in Appendix 2 page 115 of Book Four Managing Change would suggest that this is not the case)?
Q2. Is the Contractor allowed to include a general ‘weather risk’ to his own people and equipment costs and if so, is a simply percentage addition acceptable or is the Contractor required to demonstrate how this risk has been considered for each and every quotation?
Q3. If the Contractor is required to demonstrate how weather risk has been considered for each and every quotation, is there a generally accepted method of doing this?


Any compensation event quotation should include risk allowances for cost and time that have a significant chance of occuring and are at the Contractor’s risk. This would include weather that is below the threshold of assessment under clause 60.1 (13).

If the Subcontractor has not included this risk, then there would be no reason why the Contractor could not make a reasonable assessment, although based on the effect on their works. For example, the Subcontractor may have priced for 10 days work which could equate to 12 days with a reasonable assessment of weather risk. The Contractor could, therefore, include 2 days of associated attendant resources, although the assessment of Defined Cost for the Subcontractor would remain as 10 days, unless the weather conditions become a further compensation event.

A general percentage addition, to my mind, is not an adequate assessment of Defined Cost as it is not based on the principles of the Shorter Schedule of Cost Components, where the only ‘allowable’ percentage additions are people overheads and design overheads. Every other cost component is calculated by an assessment according to what is stated. I see no reason why risk allowances should not be calculated in this way, unless you agree otherwise.

An assessment of weather should be a logical calculation based on a comparison of when work was planned to be undertaken with the revised planned times. The ‘difference’ in weather conditions would be the subject of the quotation assessment. For instance by comparing the number of days of rain, frost, snow etc and pricing the measures required to account for these, such as protection, water pumping, road mats etc. The percentage may also be a ‘catch all’ and include a shortened working day (summer to winter). The best way to assess this would be to start with a detailed programme which you can agree to and then calculate the activity differences using the applicable Accepted Programme.

It is possible that a percentage addition is easier for the Contractor, especially as the cost of preparing quotations is not a Defined Cost under NEC3 Option A, although it is a ‘crude’ way of assessment.

Hi Andrew

I’m not sure if I fully agree with your comments. If it’s a NEC3 Option A the assessment should be the SSCC and as if the Contractor was doing the work and not the pass on of a subcontractor’s quote. So if the Contractor considers 10 days of work and 2 days of weather risk then the quote should be on that basis. Obviously subject to the appropriateness of the risk allowance (forecast).

Dave, my thoughts on this were that the quotation is based on actual and forecast Defined Cost. If a corresponding Subcontractor quotation has been implemented as a CE for 10 days, then that is what the Contractor would pay, regardless of whether it actually took 12 days. Any associated Contractor costs would be based on 10 days PLUS an assessment of appropriate risk allowances.