We are engaged in a Target Cost Contract ( With BOQ ). I am in the Employer’s side and we are having a discussion with the Contractor regarding revisions to the original detailed engineering Design whether it falls under “CE” or “VE”(value engineering). There have been changes that the Contractor proposed and the Contractor engaged the Design Consultant to provide the revision drawings and it was charged at the project cost. We have an amended clause Z2.7 of our contract states “The proposal shall be prepared at the cost of the Contractor and shall include a quotation with details of his assessment and alterations to the Accepted Programme”. Does this fall under Value Engineering or Compensation Event?
Roger, I am answering this with limited information so based on limited knowledge, principally that nothing that you have said indicates that Z2.7 specifically references it to be a compensation event quotation … in the same way that you can have a quotation for an acceleration which is a seperate procedure to that of CE’s with a different process and means of assessment.
Given this, it seems to me that the most likely interpretation of Z2.7 - especially as the Employer has created the uncertainty - is that it is an additional requirement for a VE change in the Works Information. I.e. either under the second bullet of clause 60.1 (1), when it is the Contractor’s WI being changed “at his request” or Employer’s WI under the first bullet of option D clause 63.11 where the Contractor proposes a change to it.
I stress again that this opinion is based on the limited information you have given me.