Payment of prelims under NEC3 option B

NEC3 and NEC4 Contracts Payment
1

I am working on an NEC3 Option B contract with the method of measurement being CESMM4. The BoQ contains project prelims at say £10,000 per week for a duration of 100 weeks.

I understand the The Price for Work Done to Date is the total of:

. the quantity of the work which the Subcontractor has completed for each
item in the Bill of Quantities multiplied by the rate and
. a proportion of each lump sum which is the proportion of the work covered by the item which the Subcontractor has completed.

I want to know who is entitled to the prelims if the project is forecasted/completed say 6 weeks ahead of clause 31 programme (if you assess PWDD as above, you will never get to 100 weeks as works would be complete at say week 94). Who gets the benefit of those 6 weeks which are not required?

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2

The way it sounds the BoQ was drafted, i.e. the prelims are expressed as a rate per week, I don’t see entitlement to the remaining 6 weeks - as per cl. 11.2 (28) you correctly cited.

NB. You would also have to look at cl. 60.4 and see if the three conditions (no change in the WI, Defined Cost per unit of quantity reduced, and resulting difference more that 0.5% of the total of the Prices) are satisfied, whereas you would have a CE with a reduced rate. Admittedly, that could only happen in the opposite scenario (more than 100 weeks) where economies of scale would be more likely.

However, if the prelims were expressed as a lump sum, the Contractor would probably have entitlement to the whole amount, as the lump sum would refer to the completed works.

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