I wanted to double check what figures are used when working out the pain and gain through the contract.
I have the following
- Agreed contract sum (original contract + agreed CE’s) - A
- Forecast contract sum (above + forecast CE’s) - B
- Consultant spend to date - C
- Consultants forecast at completion (includes forecast CE’s) - D
Currently it is worked out: D/B %
This seem strange to include forecast CE’s as this could be elevated in reduce the percentage, and could allow the consultant to be paid more.
My feeling is it should be Agreed contract sum and forecast at completion (excluding forecast CE’s)
Another question is the consultant is including CE that have been rejected and are in dispute, my understanding is that these should not be included in this calculation.
Thanks
Their forecast will be based upon what they have actually spent to date, and what they think they have left to spend. You then compare that to the Prices to see where you are, although the Prices will NOT yet include un-agreed CE’s but they will be within the forecast. Whether or not you agree these are a CE that will change the Prices it is a cost they will incur. For that reason the quicker both Parties can get compensation events to be implemented the better as the forecast compared to the Prices will be more transparent as to liability.
Obviously the pain/gain calculation is only done at the end when the Prices including implemented CE’s are agreed and the costs are all now in and auditable. A preliminary assessment is made at Completion, with the final assessment made with the final price for Services Provided to Date and the final total of the Prices are available which would/should be at the defect date which is the period identified in contract data 1.