NEC4 ECC Contractors savings for Option A

Option A (Contractor design). If the Contractor proposes a cheaper type of piling than initially proposed in his tender, are the Prices reduced in the Activity Schedule providing the savings for the Client only? Note that the alternative pricing solution fully complies with the Client’s Scope.
I would assume that the Contractor needs to resubmit his proposal for acceptance under 21.2?
And clause 16.1 does not apply in this case as the would not be a change to the Clients Scope?

If it is Contractor design and the design is compliant then the Prices are not reduced. The matter is not a compensation event, see the second bullet point of clause 60.1 (1).

You are right, clause 16.1 only applies if the request involves a change to the Client’s Scope and yes the design would need the Scope requires.

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Thanks for your response. If the Contractor proposed a better method of piling in his tender and included this in his Scope and now he wants to change his Scope and provide a cheaper solution, can the Project Manager reject this on behalf of the Client? Note that a cheaper solution complies with the Clients performance spec. Is there a mechanism in the ECC contract to prevent the Contractor doing this or at least any clause that allow to share the savings? It looks to me that in this case the Contractor takes the benefit as it is his design and he can change his Scope whenever he wants (once compliant with the Clients Scope).

The ECC allows for the PM to not accept the design if it does not comply with the Scope or applicable law. If the new design complies with the Scope and law and allows the Contractor to Provide the Works then why would the PM want to reject it - I have assumed that the whole Works are Contractor design and not just the piling works.

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Many Thanks for your response. Last question - would the Scope prepared by the Contractor as part of the Contract Data part two be considered to be the Scope under 21.2? Or is this only related to the Clients Scope? This is in case if the Contractor won the tender based on better quality ( “Rolls-Royce” solution vs min compliance).

If the Contractor has stated (in Contract Data 2) where the Scope is for it’s design then this is part of the Scope defined under clause 11.2(16). If, in the Scope, the Contractor has expressly prescribed the type of piling (your Rolls-Royce) then there is an argument that this is what is required and to provide something different (your mini) would fall under cl 16.1. If the Contractor has not been so prescriptive then it just needs to Provide the Works in accordance with the Scope.

You may also want to check the tender to see if there are any commitments from the Contractor that become binding on award that relate to the issue but I would be surprised if there was.