Hi Both,
just to add that despite the fact that the NEC does not use the term Provisional Sum, it can easily deal with them through the CE process as described by Dave, but I would add that we can already allow for them before we get into contract in terms of both Price and programme without drafting yet another dreaded Z clause.
I know the question is based on an Option A but if you consider an Option B which uses a BoQ measured in accordance with a method of measurement (m.o.m) identified within the CD1 by the Client, clearly the m.o.m can allow for the use of P Sums, so they can be included.
Similar to what Dave has described, they will be dealt with as a CE but the key is to include the work covered by the P Sum in the Works Info (NEC3) or Scope (NEC4) with an indication of what has to be done and when, and an estimated duration for how much time should be included within the programme submitted by the Contractor for acceptance.
Work covered by a P Sum should be treated exactly the same as work done by the Client or Others. Clause 31.2, 4th bullet, requires the Contractor to show the work expected to be done by the Client or Others as last agreed with them, or if not agreed, as stated in the Scope.
CE60.1(5) arises if either the Client or Others do not work within the times shown of the Accepted Programme or do not work within the conditions stated in the Scope, or do work on Site not stated in the Scope. So in other words the Scope needs to detail what is going to be done, when and how, just like the work traditionally covered by a P Sum.
Also, make sure that the Scope sets a timescale or date for when the work covered by the P Sum is likely to be instructed, again you can see something similar under clause 65.1 of NEC4 where the PM has to set a date by which their proposed instruction may be given.
If it is an Option A then the instructions to tenderers should ensure that the P Sum is also included within the Activity Schedule.
Once in contract it is imperative that both the Activity Schedule and the Accepted Programme show the work which has to be done in order to achieve Completion, so the work covered by the P Sum should be also included.
Once the work covered by the P Sum is designed it can be instructed and that of course triggers CE60.1(1) which is assessed for its effect on both time and cost, once assessed the CE is implemented by changing the Prices (Activity Schedule or BoQ) and Completion Date or Key Dates accordingly. One word of warning here, as everyone knows there is no way to set an earlier Completion Date through the CE process, so be careful when giving durations for the P Sum work in the Scope, perhaps be conservative and make sure the Client is aware of what is happening and that they should expect a CE.
With regards to the question of whether the Client gets a saving or not, the answer is ‘yes’. CE60.1(1) is one of two CE’s that allow the Prices to be reduced, see clause 63.4.
This can also be compared to the way in which a CE can be assessed using PM assumptions if the effects are too uncertain to be forecast reasonably (clause 61.6). Where the actual effects are different to the PM’s assumptions there has to be a correction and the actual effects of the correction are assessed as another CE. Again, be conservative on the time allowed, CE60.1(17) allows for a reduction in the Prices but not the setting of an earlier Completion Date.
The NEC has a number of flexible ways of dealing with uncertainty and I see no reason to not include P Sums, provided something is stated in the Scope and allowed for in the Prices and programme, a CE can always change the Prices and dates. We do have to recognise that we cannot be certain about everything, there will always be risks, success is in how we manage them.
Talking of risk, proper use of the early warning process by identifying the P Sums under section 1 of the CD1 as a matter to be include in the Early Warning Register, will ensure that the PM is managing the expectations of all in terms of time, cost and quality.
Hope that helps and happy to discuss.