NEC Option C Contract

Mike P

Sounds to me like it is a compensation event or at least should be, in which case the target cost should change as a result.

Also, take a look at the client specified risks, because if they are listed then you should be paid for them if they become reality.

If you like, please let me know your email and I will get you to send me the documents so I can review it.

Sounds like you need to action this quickly as it seems very unfair.

Hi Mike

I just googled this on NEC3 Option C

Option C: Target Cost contract with activity schedule

In this option the Contractor tenders (or negotiates) a target price using an activity schedule. Each

activity is priced as a lump sum and a Fee is also tendered as a percentage for subcontract work and

for the Contractor’s own direct work. The initial target price is the sum of the activity prices and the

fee. During the course of the contract, the target price is adjusted to cater for compensation events

that are set out in the contract.

Payment is made on the basis of actual costs with an incentive mechanism for the Contractor to

minimise costs. Savings and over-runs are shared between the parties. The sharing of risk in the

target cost approach is likely to reduce the occurrence of disputes.

If these gravestones are a compensation event then you should apply for it soonest.

It seems that the initial target price is adjusted on that basis.

Unless you have accepted all underground risks.

Look at clauses 60.1 (7) and (12)

Best regards

Mike Testro