What is defined cost NEC3 option A?

Broadly speaking, Defined Costs are the actual costs incurred by the Contractor on the Works minus retention and any costs which would fall within the overheads covered in the Fee. From those are deducted “Disallowed Costs”.

What is NEC option B?

Option B is a priced contract with a bill of quantities where the risk of carrying out the work at the agreed prices being is borne by the contractor. This document contains all the core and secondary option clauses, the shorter schedule of cost components, and contract data, relevant to an option B contract.

What is NEC option C?

It is a suite of construction contracts intended to promote partnering and collaboration between the contractor and client. …

What is NEC option E?

Option E is a cost reimbursable contract in which the contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee. Option E contains the core clauses, secondary option clauses, schedules of cost components, contract data, and so on.

Is NEC option a lump sum?

Under this option, NEC allows for partial payments based on the proportion of the work that has been completed at the time of the interim payment. As such, it can allow for more constant cash flow and be more flexible. Priced contracts allocate a lump sum for the work.

What is a compensation event under the new NEC3 legislation?

NEC3 does not provide a definition of what might constitute a compensation event, but there is a list of specific compensation events at clause 60.1. The list includes: actions by the employer (i.e. an employer’s failure to allow a contractor access to and use of the site by the agreed date);

When is an event not a compensation event?

If an event is not a compensation event the Contractor is deemed to have priced for it. The ECC has its standard list of compensation events (mainly in clause 60.1).

Can a contractor claim for delay and disruption under NEC3?

If a compensation event occurs and, as a result of the event, there are labour and plant (Equipment under NEC3) resources not fully utilised, then this needs to be included in the assessment. A contractor would not be entitled to submit a separate claim for delay and disruption under an NEC3 form of contract.

What is a compensation event in a construction contract?

If an event is a compensation event, the Contractor is compensated for the effect of the event on the time and cost or competing the works (unless the event was due to a ‘fault’ of the Contractor). If an event is not a compensation event the Contractor is deemed to have priced for it.