NEC4 Option A - Quote substantiation

When assessing a CE Quote on an NEC4 Option A, what substantiation can be requested against forecast Subcontractor costs


The Contractor is responsible for substantiating their claim so any Defined Cost has to be proved. It’s reasonable to ask for justification, it’s not reasonable to just put in a lump sum and expect it to be paid. So I’d expect a breakdown of some sort, it might be a bit rough and ready but it still needs to be explained in accordance with the Short Schedule of Cost Components i.e. people, Equipment, Plant and Materials, Subcontractors, manufacture and fabrication and design.

For Subcontractors ideally you would have some information from them to justify the amounts you want paying. If you haven’t got this then you’ll just have to estimate it as best you can. Remember, you take the risk of this estimate, if it ends up costing more you won’t get paid more, but if it costs less you will benefit.

Also, just because it’s hard to forecast it doesn’t mean you’re not entitled to recover something for it. If it is too uncertain to be forecast reasonably you should ask the PM to state an assumption under clause 61.6. Remember though there is no such thing as a Contractor’s assumption, it has to be one made by the PM.


Can the PM request to see either a subcontractors quote (if available) or thier Sub contract to substantiate the defined cost i.e. the subcontract rates being applied etc?

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Yes that seems like a reasonable request, remember the burden of proof falls on you to substantiate the Defined Cost, and if you fail to do so you leave yourself open to a PM assessment.

You shouldn’t have a problem in justifying the amounts you want to be paid, unless maybe you have something to hide … note component 4 Subcontractors states you are entitled to “payments to Subcontractors for work which is subcontracted”, isn’t a “payment” either what you have actually paid to the Subcontractor or what you forecast you will be paying?

Clause 10 is also relevant!