NEC4 Option C - CE payments

NEC3 and NEC4 Contracts
1

Please can you clarify what a Contractor would be paid for Implemented Compensation Events on a standard NEC3/4 Option C:

Example: Contractor is working on a Contract with a Target of £900,000. The Contractor submits a price for a CE of £80,000, the PM agrees to this and implements the CE. The Tagret value is now lifted to £980,000 and the activity schedule revised. The Contractor completes the CE work fo £50,000, however the activity schedule has been revised and has £80,000 against the new CE activity. Would the Contractor get paid only Defined Cost for the CE work (the £50,000) when the activity is complete ? (they only gets paid the true cist incurred). They then get a share of the pain/gain on the difference on the CE (£80,000 minus the £50,000 = The Contractor gets a percentage of the £30,000). Is this correct ?
thanks

2

In simple terms, the Contractor would be paid the Price for Work Done to Date (Defined Cost + Fee) for the work whilst it is progressed, the work does not need to be completed. The Contractor’s share (pain/gain) is initially assessed at Completion based on the whole works and the total of the Prices not activity by activity.

3

Sorry wrongly posted

4

Hi, please also note that the PWDD for main Options C to F is total Defined Cost which the PM forecasts will have been paid by the Contractor before the next assessment date, the Contractor is paid in advance, this is often ignored. Under clause 20.4 the forecast of the total Defined Cost for the whole of the works is adjusted at the intervals stated in the Contract Data 1, in consultation with the PM again often ignored.