The Project Manager has recently assessed (its own assessment) a Compensation Event. It referenced additional work and omissions in its assessments to arrive at a change to the Prices. It alluded to some other omissions/ cost savings but did not seem to apply these in its assessment. It has now completed its assessment, issued same to the Contractor and issued the Completion certificate. Can it now apply reductions to the contract sum, which relate to the assessed CE, by making omissions or reducing quantities from the Bill of Quantities? If not, can it raise another CE so as to make these reductions, even tough the work in question relates to the same scope change as the CE it has just assessed?
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Hi Oliver, a few things to unpick here. Firstly, the PWDD in an Option B is a measure of the actual work completed multiplied by the rates in the BoQ plus work covered by lump sum prices - 11.2(30). So, the assessment of the amount due at Completion should reflect all the work actually done which of course can be different to the quantity stated in the BoQ, the quantities in the BoQ are approximate. If there are items in the BoQ that are not done there should be a reason why, either the work has been omitted under a 14.3 instruction or, there might perhaps be an ambiguity or inconsistency between the BoQ and the Scope; either way a CE will be triggered under 60.1(1) or 60.4, 60.5 and/or 60.6. The PM has to notify CEs arising under 60.1(1) and 60.6, the Contractor notifies 60.4 & 60.5.
Secondly, your description of the actions which the PM is taking is not consistent with the contract. Compensation events are the events listed under clause 60.1 all of these are the consequences of a preceding event, the preceding event must have happened or be expected to happen in order to trigger the CE process. So for the PM to assess a CE there must first be an event that has happened, it must be one of the events under 60.1, 60.4, 60.5, 60.6 and it must be notified by either the PM or the Contractor.
Thirdly, clause 66.3 states that once a CE has been implemented (see clause 66.1 for what that means), the assessment cannot be changed except as stated in the conditions, those circumstances are where the PM has made assumptions under 61.6 which are found to be incorrect or, through a decision of the Adjudicator.
It sounds as if the PM needs to unravel what has happened; identify the appropriate compensation event; notify it and instruct the Contractor to submit a quotation. If any of the events fall outside of those to be notified by the PM under clause 61.1, the Contractor has 8 weeks to notify them from the time that they happened, otherwise the Contractor loses its entitlement to have the Prices and/or Completion Date changed - 61.3.
Hope that helps, happy to discuss.
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