NEC4 Option A Design & Build

NEC3 and NEC4 Contracts Compensation Events
1

The client has selected a preferred contractor from a framework contract for a project to be undertaken via a call-off. As stipulated by the framework, the call-off contract is an NEC4 Option A.
The project is a design and build with the Contractor set to take the previous design at RIBA 4 (undertaken by others) to RIBA 5 and carry out the construction etc.

The client thinks that as the RIBA 4 design is rather old (2+ years) a significant number of changes may emerge when the Contractor undertakes the design to RIBA 5. The client is concerned that these changes will give rise to an influx of CE’s.

Am I correct in my assertion that given that this is an NEC option A D&B contract, the Contractor takes the risk and any changes in the design which emerge from the Contractor taking the RIBA 4 design to RIBA 5 would simply be classed as design development and therefore not a CE (i.e. the bullet point 2 exception under clause 60.1 (1)).

2

My gut feeling is that Option A doesn’t seem suitable as a strategy for this scenario and I’d have been tempted to have taken the design to the next level under a different Option and then re-competed the build element under an Option A arrangement once the scope is firmer. Though I appreciate time pressures don’t always allow for this!

It’s likely the Contractor has perceived the risk and built it into their price accordingly but in my experience that’s unlikely to mean there won’t be CE’s. Option A’s do lend themselves to commercial tension especially.

I believe you are right - changes to the design won’t be a CE unless the PM instructs a change.

If the Client perceived these risks they could include in the Contract Data some additional Employer’s Risks to simplify the process. Alternatively they may just be happy to pay the increased contract sum (due to the risk added).

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