If the final quantity of works done is less than that stated in the Tender BoQ how is this reduction assessed by the Project Manager?
Can it be done from first principles (using the PM’s rates) or is the BoQ reduced pro rata using the tender rates?
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The answer is potentially a bit of both! It all depends how much the quantity has changed by. If you look at clause 60.4, it is assessed as a compensation event if an individual BofQ line item changes by more than 0.5% of the original total of the Prices. Other than that you use the rates in the BofQ to assess the reduction. I say reduction, but in truth if the Contractor has done less of it, they will just have been paid for a lesser quantity.
Important to recognize that it is only the extra over that is assessed as a CE using first principles (Defined Cost). If the quantity is 21 less widgets and 20 widgets takes it to the threshold in 60.4, then it is only one widget that would be assessed as the compensation event using “first principles”. However, also note clause 63.13 which states that BY AGREEMENT rates and lump sums can be used to assess compensation events. You now need to go to a dictionary (rather than the contract) to see what “by agreement” means!!