Thanks for the answer to my original question. Continuing along the same line I understand compensation events are assessed based up the actual defined cost, the forecast defined cost and the appropriate fee percentage. With my original question relating to weather, the compensation event was to be based on actual defined cost and there was no need to forecast defined costs, and therefore excluding specific people rates is not an issue. What happens when compensation events occur at an early stage of a Project and you are required to forecast defined cost which has not been incurred previously and is not based upon a pre-agreed rate?
I thought compensation events were not “loss and expense” in that you did not have to identify actual cost to justify entitlement, and also I thought the purpose of a SSCC was to simplify the assessment process by having rates agreed therefore reducing disputes and preventing the justification/substantiation of an assessment being overly laborious?
Any thoughts gratefully received.
Compensation events which are Employer risk events under the contract - should put the Contractor back into the same position had the compensation event not occurred. Using Defined Cost in lieu of rates means that a Contractor should be indifferent to the solution as he will be compensated his actual Defined or forecast Cost. This is in lieu of tendered rates and prices which could be high or low and often led to games on the variations issued on traditional contracts.
I tend to think of the calculation of the Prices as resource based estimating with the quotation built up from the principles stated in the SCC or SSCC.
So taking your first paragraph which outlines Clause 63.1 it states that changes to the Prices are assessed as the impact of the compensation event on actual Defined Cost of work done, forecast Defined Cost of work not yet done and the resulting Fee.
Their are no stated rates for People in cost component 1 instead you build up the forecast cost of a person/or grade of person who will be involved with the compensation event at the time when it occurs.