Is there an actual statement in the NEC3 Engineering and Contruction Subcontract confirming who takes the risk on an Option B Subcontract. We have priced a bill of quantities provided by the Contractor which doesn’t included all the information in the works information. The Works Information only names the Employer and the Contractor and there is no statement to say that the Subcontractor takes on the Contractors responsibilities in this document. Our argument is that we have priced a BOQ provided by the Contractor and anything not in the BOQ will be subject to a Compensation Event.
Are we correct to make this statement or what is the contractual process here?
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Have a look at option B clause 60.7 which covers inconsistencies between the BoQ and other documents.
From what you say there is an inconsistency between the BoQ and the Works Information.
Under 60.7, the Subcontractor is assumed to have taken the BoQ as correct, so it sounds as if your argument is correct.
Jon has answered your specific question which indeed confirms that errors in the Bill of Quantities are teh Employer’s risk under option B. In addition with option B and your question it is worth noting the following:
clause 55.1 - Information in Bill of Quantities is not Works Information or Site Information
clause 60.4 - changes in quantities once they exceed a certain threshold become a compensation event - and should be assessed at Defined Cost rather than rates in the bill of quantities
clause 60.5 - even small changes in rates if they affect planned completion could be assessed as a compensation event
clause 60.6 - corrections to the bill of quantities are also compensation events.
Does core clause 17. 1 - if replaced by a Z clause (transferring the risk to the contractor) overrule the above?
Samuel : the answer is ‘No’ as 17.1 is deleted. 17.1 only covers the notification of it and the resolution by the Project Manager (or Contractor in the above case). All the other option B clauses mentioned above would still stand as being compensation events, but the contractual method of resolving the actual problem would have been deleted. What is the point of that ?
Depends upon what the Z clause says, but would have to explicitly delete the above clauses mentioned to transfer the risk. That will lead to higher prices and you would have to ask, why not use option A as opposed to mucking around with the contract.
Thanks Jon, I couldn’t agree with you more. I’m on the receiving end of a contract which has been mucked about with. Please see the wording in the clauses below.
Zl7.5 Insert at the end of clause 17.1:
“There is no addition to the Prices or any delay to the Completion Date arising from any such ambiguity or inconsistency.”
Zl7.6 Insert a new clause 17.2:
“I7.2 In the event of any discrepancy, ambiguity or conflict between the Z clauses and any other contract document or condition, the terms of the Z clauses prevail.”
Your comments will be appreciated.
Samuel, my initial reading of this is that you - as a Contractor - have allowed yourself to be well and truly kippered.
I did start to put down alternative arguments but, on initial contemplation, don’t thnk they are strong enough to get round this amendment.
I fully agree with your assessment of the situation. The concern is that the employer could feasibly make deliberate mistakes in the BoQ that may not be noticed by tenderers.
I think however there is a counter argument; Clause 60.7 is valid, can it therefore not be construed that the BoQ clarifies the Works Information where the Works information is ambiguous?
Samuel - The last line of your response:
“BoQ clarifies the Works Information where the Works information is ambiguous?”
As Glenn identified above clause 55.1 - Information in Bill of Quantities is not Works Information or Site Information - so the BoQ does not clarify