NEC4 Type A - PM Omitting Costs

We are a contractor carrying out some infrastructure improvement works under an NEC4 Type A contract. During the tender period it was discussed between the parties that an allowance for manual traffic control should be made to reduce the impact on the existing traffic load. This was included within our tender.

Once works had started, we determined that utilising the existing traffic system negated the requirement for any manual traffic management. This did however incur its own costs such set up, maintenance and temporary works. These costs have not been claimed as a CE as we determined it is all part of the traffic control costs.

Subsequently, one year into the project, the PM issued a PMI under Cl.14.3 changing the works information and provided an assessment omitting a sum of monies from our contract for manual traffic control. The assessment was based upon pulling a figure from a BoQ that was provided as part of our tender submission. This assessment did not include the costs incurred from using the automated traffic system in lieu of the manual traffic control. We do not accept this and have confirmed that to the PM.

We have suggested that there has been no change to the works information as there is no contract document that determines how the traffic should be controlled. We, as the contractor, have found a better and more cost effective solution than the previously envisaged one and this is a lump sum contract. The PM has currently rejected our position and maintains their assessment stands.

Please can you advise who is correct?

The Contractor is correct, you have provided the “Activity” via different means and costs, but still delivered the activity in accordance with the Works Information. If the activity can be done cheaper the Contractor benefits and vice versa. The PM is on very shaky ground here, they can’t just determine this is a change mid contract. I’m not sure what has happened in using a “BoQ” for an assessment of a CE under an Option “A”, it would not have a “BoQ”. Any assessment would need to be a forecast of Defined Cost, Risk & Fee.

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