Under the NEC3 Option D, the Contractor is not required to obtain PM’s approval with regard to all procurement for supply of materials and lease of equipment (heavy and minor).
Our accounting section is conducting post-audit of all defined costs, including incurred costs for the above.
In the process, we found out that the prices for certain materials procured were higher than prevailing market prices.
Can the PM disallow the cost difference between the current market price and the incurred cost?
In addition, it was also found out that the Contractor awarded to the highest bidder the supply of materials instead of giving it to the lowest bidder, despite both satisfying the test requirements of the Works Information. Can the PM also disallow the differential cost between the lowest and awarded bid?