NEC3 TSC: Who owns the target cost in a TSC and who is responsible for errors and omissions?

Within the Term Service Contract, option C. Who is responsible for the Price List when a target contract is agreed at the start of a scheme?

I’m currently working on a scheme where more regulating material was required by the Contractor whilst on site. All documents were available when the scheme was targeted using a mix of Price List items and new 1st principle items. No changes to the works information has occurred but the Price List did not contain enough regulating material.

Is a Compensation Event for the shortfall in regulating ok as this is an Employers Risk or do we share the omission jointly once we agree a Target Cost?

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It is not a compensation event, but if you look at the definition of the Prices, (option C clause 11.2 (20)), it states that “The Prices are … . Where a quantity is stated for an item in the Price List, the Price is calculated by multiplying the quantity by the rate.”

So the target Prices is adjusted by the increase in quantities (Employer’s risk) multiplied by the rate (Contractor’s rate).