I Have a contractor who is submitting quotations for CE’s that have assumptions for most line items, using the word “Assumed” with no narrative or clarification as to the “Assumed” element of the item.
I would also like to know if as per the ECC a CE in an ECSC with assumptions that are later found to be incorrect cannot be revised to reduce the cost and only to increase the cost.
In contrast to the ‘long form’ contracts, all the ‘short form’ NEC4 contracts provide for assumptions to be made when preparing a quotation, by whichever party is preparing the quotation (Client where Contractor is in default). There is a specific compensation event that provides for any such assumptions to be corrected, which is common across all the NEC4 contracts.
For reduced Prices, the short form contracts do not contain the same clauses as the ‘long form’ versions and only specifically mention reduced Prices in relation to accepting Defects. As it is silent as to what matters could reduce the Prices, then it would be reasonable to assume that they can be reduced when correcting an assumption.
I also note that within the ‘long form ‘ NEC4 contracts the Prices CAN be reduced for correcting an assumption (see clause 63.4 of the NEC4 ECC).
Hi Andrew, Thank you for the response and information. what is your opinion on Assumptions and how they should be presented in a Quote, would the below be acceptable in your opinion?
| Column 1 | Column 2 | Column 3 | Column 4 | E | F | G |
|---|---|---|---|---|---|---|
| Induced joints (SJ) - surface groove 5-10mm wide | 5.5 | m | £50.00 | £275.00 | Assumed | |
| Sealant if required | 5.5 | m | £10.00 | £55.00 | Assumed | |
| isolation joint (SJ) - 10mm compressible hydrocell board to wall | 29.5 | m | £60.00 | £1,770.00 | Assumed | |
| Sealed at hed with 10mm x 5mm 2 part thorlfex 600mm sealant | 29.5 | m | £10.00 | £295.00 | Assumed | |
| Encase steelwork columns below ground in 50mm thick concrete | 7 | nr | £250.00 | £1,750.00 | Assumed | |
| Shuttering | 7 | nr | £50.00 | £350.00 | Assumed | |
| 4nr H10 dowels 800mm long at corners of column in top of slab (assumed to 1nr internal column) | 4 | nr | £36.56 | £146.24 | Assumed | |
| Isolation joint | 1.36 | m | £50.00 | £68.00 | Assumed | |
| Base plates embedded on grout to columns | 8 | nr | £60.00 | £480.00 | Assumed | |
| DISPOSAL SYSTEMS | ||||||
| R12: DRAINAGE BELOW GROUND | ||||||
| Excavation of trenches; by machine; for drainage pipes or the like: | ||||||
| Trenches to suit pipes not exceeding 200 mm diameter; average depth: | ||||||
| 0.50 m | 6 | m | £46.78 | £280.68 | assumed | |
| £- | ||||||
| D20: EXCAVATING AND FILLING | £- | |||||
| £- | ||||||
| Off site disposal of material arising from earthworks | £- | |||||
| £- | ||||||
| Removed, including providing a suitable tip: | £- | |||||
| £- | ||||||
| machine loading | 2 | m3 | £51.12 | £102.24 | assumed | |
| £- | ||||||
| Beds and coverings for drainage pipes | £- | |||||
| £- | ||||||
| 150 mm bed and 150 mm covering of C10P concrete to pipes: | £- | |||||
| £- | ||||||
| not exceeding 200 mm diameter | 6 | m | £18.78 | £112.68 | assumed | |
| £- | ||||||
| Filling to excavations with imported materials | £- | |||||
| £- | ||||||
| Filled into excavation; by machine; compacting in layers: | £- | |||||
| £- | ||||||
| DTp type 1 | 1 | m3 | £54.12 | £54.12 | assumed | |
| £- | ||||||
| Drainage pipes | £- | |||||
| £- | ||||||
| UPVC pipes; OsmaDrain: | £- | |||||
| £- | ||||||
| 110 mm | 6 | m | £26.78 | £160.68 | assumed | |
| £- | ||||||
| Drainage fittings | £- | |||||
| £- | ||||||
| UPVC fittings; OsmaDrain: | £- | |||||
| £- | ||||||
| 110 mm junction | 1 | nr | £76.00 | £76.00 | assumed | |
| 110 mm rest bends | 1 | nr | £76.00 | £76.00 | assumed | |
| £- | ||||||
| Connections to existing drains | £- | |||||
| £- | ||||||
| Break into existing live manhole; build in end of new pipe and make good walls and benching; | £- | |||||
| excavation; backfilling; reinstatement (excluding statutory authority fees): | £- | |||||
| £- | ||||||
| one brick thick engineering brick walls; 100 mm pipe; 225 mm concrete benching; in | 1 | nr | £1,200.00 | £1,200.00 | assumed | |
| courtyard 1.00 m deep | £7,251.64 | |||||
| s/c prelims | 1 | item | £750.00 | £750.00 | assumed | |
| £8,001.64 | ||||||
| Fee | 15% | £1,200.25 | ||||
| Cost | £9,201.89 | |||||
| Time | 1 | week | £6,142.41 | £6,142.41 | assumed | |
| £15,344.30 | � |
It is not clear from your example whether the assumption relates to the quantity, the price or both, as it doesn’t indicate this.
An assumption should be made where the effects of the CE are too uncertain to be forecast reasonably. Assumptions are corrected only where one party notifies of a correction, although this does leave the matter ‘open ended’, which is not an ideal situation especially as a CE can be notified until the issue of the Defects Certificate.
The options are that the quotation is accepted or that you make your own assessment, as the ‘short forms’ do not provide for revised quotations. Perhaps discuss this matter with the Contractor and confirm any applicable assumptions in writing as a formal record, which can be referred to if any corrections are notified.
Hi
This is my point exactly that the Contractor is not giving clarity on the Assumptions so it leaves the CE open to revisit.
i have been having discussions with them on this subject and they feel that these are adequate assumptions. It has been leaving us with little option but to make a Client Assessment and remove the assumptions where it is felt appropriate.
On the matter of giving notice to correct an “Assumption” is the same time bar of 4 weeks for clause 61.3 applied to when it is known that a Contractor Assumption is incorrect as to when a CE should be raised and if not then the Prices and Completion Date are not changed. I ask this as the Clause states “unless the event arises from a correction to an assumption stated by the Client or the Client giving
an instruction or changing an earlier decision.” and is silent on the contractors Assumptions.
From my reading of this, if the Contractor made the assumption and was then aware of a correction to that assumption then the ‘time bar’ at clause 61.3 would apply to a Contractor notification, although the Client could still notify a correction.
So long as the Client was aware of the correction to make the notification.