We are the Contractor on a NEC3 TSC contract option A, with X19 task orders.
I have just realised that I have incorrectly assess a number of CE’s (this is the first time I have worked on this form of contract). These have been accepted by the SM.
My first query is, if a CE has been accepted, even if it has been assessed incorrectly, is that rate effectively locked down or if the error comes to light can the price be adjusted to correct the error?
The error has occurred as while the CE was assessed using the forecasted defined costs of the activity, not based on the change in forecasted defined costs (as per guidance notes 63.2).
My second query is if the defined costs was assessed as if the contractor was to carry out the works themselves and accepted, however the works are subsequently carried out by a subcontractor at a lower price. Again, does the price have to be revisited? The Employer can audit defined costs, if they do so the variance will be obvious. They may also have a strong argument that the intent was always use a subcontractor.
Thank you in advance.
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Unfortunately in accordance with clause 65.2 once a compensation event is implemented it is not revised. If you stand to lose a significant amount of money then you might appeal to the Service Manager’s / Employer’s better nature however contractually they’d be within their rights to quote this clause and say sorry, no we can’t change it.
This clause applies both ways, so once implemented if you find a cheaper way of carrying out the work then you’ll make more profit, the Employer does not get to revise the compensation event.