NEC3 Use of rates for Defined Cost

The Project Manager agreed to a compensation event and the Contractor submitted his quotation using Defined Cost as per the schedule of cost components. The Project Manager decided to make his own assessment and used rates in lieu of defined cost. The Contractor never agreed for rates to be used however the Project Manager implemented the CE. The Contractor notified a dispute and unexpectedly, the Adjudicator ruled in favour of the Employer who stated that rates must be used. Please confirm that defined cost is the default for assessing CE’s and also that the Adjudicator doesn’t have the power to decide that rates must be used to assess a CE if there is no agreement with the Contractor.

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Yes you are correct. Defined Cost is the default position for assessing a CE, only by agreement can rates or lump sums be used. The Adjudicator should be assessing the dispute in accordance with the rules of the contract.

I guess the PM could use “rates” from a source to build up elements of the schedule of cost components - but they can’t use activity schedule rates instead of using Defined Cost as a whole.