The contract talks significantly about forecast defined cost for compensation events but, due to the timescales involved in the quotation procedure, some or all of the work arising from the compensation event can be completed in advance of the submission date. In this scenario, it would make sense to use records. However, this can result in the contractor wholly relying on the method and basically looking for cost reimbursement. When this happens the employer usually ends up paying for the contractor’s inefficiencies with no risk carried by the contractor.
Answer
The contract does expect compensation events generally to be assessed on a forecast basis. There is nothing to stop the project manager sitting down with the contractor and working through the notification, quotation, assessment and implementation stages together in a very short period of time for the more straightforward compensation events. Those that need that bit more attention should follow the contract processes.
Clause 63.1 states that the date when the project manager instructed or should have instructed the contractor to submit quotations divides the work already from the work not yet done. You mention that this point on your contracts is generally in advance of the works being carried out. This means that this point must be used in the quotation by the contractor; it cannot use records as a basis.
It is for the project manager to ensure that the contract is followed despite the contractor’s efforts, which means that if no quotation is submitted by the contractor then an assessment is made by the project manager on exactly the same clause 63.1 basis as I describe.
Ultimately, if neither party nor the assessment is disputed, then adjudicators will put themselves back at this point. Basically, neither the project manager nor the contractor can wait and see what resources are actually used – the contract does not permit this except in the circumstances that project manager assumptions are used.
