NEC3 - Option B: Pricing of a CE

We (the Contractor) have carried out a Project Managers Assessment of a Compensation Event Quotation submitted by the Subcontractor. The reason for the PMA is the quote includes time & cost for preparation of the CE quote, we argue this is not allowed/warrented under NEC3. The Subcontractor disagrees, who is correct ? The PMA just removed this time/cost element from the quote.

Assuming you are using the NEC3 Engineering and Construction Subcontract then you are, as Contractor, entitled to make an assessment of a compensation event in certain circumstances under clause 64.1, in this case it’s because you don’t think the Subcontractor has assessed it correctly (second bullet point in clause 64.1).

The compensation event is based on Defined Cost plus Fee with the definition of Defined Cost at clause 11.2(22) specifically excluding “the cost of preparing quotations for compensation events”, so you are indeed correct to assess without these costs. Your assessment of time should not change though based on this, as the work that was affected by the compensation event should have been completed regardless as to the time it took to prepare and submit the quotation.

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