NEC4 ECC: Option A - can the Contractor recover it’s costs for preparing CE ?

We are a Contractor, and have been asked under a PMI to prepare a number of CE Quotations for the Client. Under NEC4 Option A, I thought we could claim for assessing the impact on our works, but not for preparing the quotation? As the client is suggesting we are not even allowed to charge for assessing the impact of such CE as our onsite project team are covered under the prelims.

You are right, the definition of Defined Cost was amended from NEC3 clause 11.2(22) to NEC4 clause 11.2(23) and the Contractor can now recover the cost of preparing quotations.

Whether you can recover other prelims as part of a CE quotation will depend on the impact of the CE on planned Completion. If the CE does not affect the critical path, planned Completion will not be delayed and as such you are not entitled to an extension of time or time-related prelims as a result.

An exception to this would be that if in order to deal with the CE you need to bring additional prelim resource onto Site (e.g. to supervise / manage the CE works) then you could include this in your quotation.

Should it be clarified that the cost of preparing the quotation for the CE only becomes a CE in its own right if the quotation is not accepted. In terms of whether the cost for the initial assessment should be included as part of the CE quotation would be covered by the provisions for assessment i.e. if no additional resource is brought in to review / assess the proposed CE it would be difficult to argue that there will be a change in the forecast of the prices as the site team has not been supplemented and they are merely operating the contract. The potential for CE’s to occur under the contract is contemplatable a contractor should not necessarily be reimbursed for “operating the contract”. Obviously if there is a delay to the planned completion which would require the extension of “preliminary” type resources then the cost is effectively recovered during this period although not directly reimbursable.