The Bill of Quantities Under NEC

An NEC bill of quantities is the priced list of items, quantities and rates that drives Options B and D. Under Option B it sets payment directly, and under Option D it sets a remeasured target for the share. Under both, information in the Bill doesn't form part of the Scope.

That last point surprises people who come from traditional contracts. A Bill description tells you how work is priced and measured; the Scope tells you what has to be built. This guide covers NEC4 ECC, with NEC3 numbers noted, and is part of the NEC main Options section.

Rules at a glance

Rule	NEC4 ECC	NEC3 ECC
Bill information isn't Scope or Site Information	56.1	55.1
Quantity difference changes unit cost: compensation event if tests are met	60.4	60.4
Quantity difference delays Completion or a Key Date: compensation event	60.5	60.5
Mistakes in the Bill: correction is a compensation event	60.6	60.6
Correction of an inconsistency with another document: Contractor is taken to have assumed the Bill correct	60.7	60.7
Assessments are written as changes to the Bill	63.15	63.13

What the Bill does under each Option

	Option B	Option D
Monthly payment	Measured work at rates, plus the finished part of lump sums	Forecast Defined Cost plus the Fee: the Bill isn't used
Final comparison	None	Remeasured Total of the Prices against final cost
Why measure regularly?	To get paid	To forecast the share

Method of measurement

The Contract Data names the method of measurement for Options B and D, and it can state amendments. Your choice matters for two reasons. It decides how the Bill is written and what an item is taken to include. It also sets the standard for a mistake under 60.6: a departure from its rules for item descriptions or for dividing work into items.

A mismatch between the work and the method can cause trouble. Civil and building methods differ. If you're using a different method for part of the work, state that clearly, and make sure the Bill's preamble doesn't quietly contradict it.

Correcting mistakes

A mistake can be either a departure from the method of measurement or something ambiguous or inconsistent. Correction goes through the Project Manager, and it's a compensation event that can move the Prices either way. Examples with illustrative figures:

• Item left out. The method calls for a separate item for formwork, but the Bill has none. The correction adds an item, and its assessment raises the Prices.
• Double counting. Excavation is billed in two sections for the same work. Correcting this reduces the Prices.
• Inconsistency. The Bill says 150 mm pipe and a drawing says 225 mm. Under 60.7, the assessment assumes the Contractor took the Bill as correct. So if it priced 150 mm, and the Project Manager instructs 225 mm, the Contractor gets the difference through the assessment.

What 60.4 does and doesn't do

Normal variations in quantity don't reprice a rate. Clause 60.4 applies only when three conditions all hold: the difference doesn't come from a Scope change, it causes the Defined Cost per unit to change, and the rate multiplied by the final quantity is more than 0.5% of the Prices' total at the Contract Date. If unit cost falls instead of rising, the affected rate is reduced.

That threshold measures the item's final value, not the size of the change. Assessing the new rate properly can take some work, and the guide to compensation events under Options B and D covers it.

A measurement checklist

1. Agree how and when measurement happens, who attends and how it's recorded.
2. Decide how lump sum items, such as preliminaries, will be proportioned for payment.
3. Exclude or flag work with notified Defects whose correction would delay following work.
4. Keep a running reconciliation of billed against measured quantities, and highlight items heading for 60.4 or 60.5.
5. Update the Bill promptly when compensation events are implemented, in the 63.15 form.
6. Feed your quantities into the Price for Work Done to Date at each assessment.
7. For Option D, feed the measured total into your forecast of the share.

Common mistakes

• Treating the Bill description as the Scope. If the Bill says a thing that the Scope doesn't, 56.1 means the Bill doesn't create that obligation. But it could well indicate a mistake to correct.
• Treating every compensation event as a Bill rate exercise. Assessment is on Defined Cost through the Short Schedule of Cost Components under Option B. The Bill records the result. Option D uses the full Schedule. See the Schedule of Cost Components.
• Waiting until the end to raise quantity effects. A difference that causes delay under 60.5 will arise during the job, and the usual notification rules apply. Read clause 61.3 on time limits.

Related guides

• NEC Main Options: A to F Explained
• Target Cost and the Contractor's Share
• Pain/Gain Share Explained
• Setting Share Ranges and Percentages
• How to Choose an NEC Main Option
• The Activity Schedule

This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.