NEC3 Option A, Contractor has submitted a quotation for a change to the Works Information. The change includes for additional work and some work to be removed. The Contractor has gone out for three quotations and has used the highest sub-contractors quotation for the additional works. The Contractor is also using the least expensive quotation to omit works not going ahead.
Should the Contractor be using the least expensive (value for money) quotation for the additional works, providing the subcontractor complies with all contractual requirements (SSCC + fee & subcontractor fee %). How do I deal with the omission of works - the Contractor priced for the tender?
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@WilliamBrown can you help with any advise please
There is no black and white answer to this question. There is no rule to say that the Contractor must use the least expensive quote, or that it is entitled to use the most expensive quote. It all depends on the circumstances.
Clause 63.7 states that the assessment of a CE is based on the assumption that the Contractor reacts competently and promptly… and that “any Defined Cost and time due to the event are reasonably incurred”.
You could argue that the Contractor using the most expensive quotation means that it is unreasonably incurring Defined Cost. This is very fact dependant however as, for all you know, the most expensive quote might have risk items etc built into it whereas the others don’t. Similarly, it would be unreasonable for a Contractor to accept the lowest quote, as the Subcontractor might have failed to price something correctly.
My advice here, would be to review the quotation with the Contractor in a collaborative way to try to understand what the quotations include. If you come to a view that all of the quotes are for the same work, and the Contractor had no reason to use the highest quote other than trying to generate additional Fee, then you would make a PM’s assessment - citing the 2nd bulletpoint of clause 64.1.
On your second question re the omission, you deal with this in the exact same way as a normal compensation event i.e. determine the Defined Cost plus Fee associated with the omitted work, and take this off the total of the Prices. You do not take into account what the Contractor priced (or failed to price) at tender stage. See clauses 63.2 and 63.10.
Hope this helps!
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