NEC 3 - Option A, with Price Adjustment for Inflation.
X1.3 - Requires the CE quote to be adjusted back to the base date by using: CE/1+PAF. This paragraph is referring to “assessments”.
Option 1: Should the CE be implemented at the deescalated rate i.e. Contractor quotes £1000 for a CE, PM deescalates at gets a figure of £960, this is the implemented value and put in the revised Activity Schedule. Upon completion of the CE works the Contractor applies for the £950 with the PAF that point in time applied ?
Option 2: The CE is implemented at £1000, when the application is made the PM de-escalates to base date using the PAF at the date of implementation and then applies the current PAF to the whole payment application ?
Both methods give you the same end result, the first in effect means all CE’s become a Project Managers Assessment as they are not implemented at quoted value. I believe the correct method is Option 2, but have recently seen Option 1 used.