NEC3 Option B - Defined Cost lower than BQ Rate

The original Works Information required 100 units of S.S. door, the priced BQ rate is $3000/unit.

The PM has changed the Works Information to reduce the quantity to 80 units, and Fee % is 30%, Defined Cost is $1800/unit, which is lower than the BQ rate.

The question:
I would like to know the principle of how to assess the cost of this CE? the contractor owns the credit ?

CE quotation :
-20 x $1800*1.3 = -$46,800

By remeasurement excercise, $ to be paid to the Contractor:
-20 x $1800*1.3 = -$46,800
20 x $3000 = $60,000
80 x $3000 = $240,000

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Alan, welcome to the community.

Your logic & calculation seem correct, if $1,800/unit is indeed the Defined Cost, based on the SSCC; See clauses 63.1 and 11.2 (22).

However, if the work had not been done at the dividing date - and it normally shouldn’t have if the PM instructed the change - the changed Prices after implementation (i.e. $300,000 - $46,800 = $253,200) should be reflected in the BoQ by means of a changed rate and a changed quantity in accordance with clause 63.13, 1st bullet point. The respective line item in the BoQ would then read as follows: 80 units @ $3,165 = $253,200.


Thanks, Peter. Your reply is clear and directive.

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No problem at all - I’m glad it helped.

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