No, you can't reopen it just because the job cost more. If actual cost is higher than your accepted quotation, clause 66.3 of NEC4 ECC (65.2 in NEC3) keeps the assessment as implemented, and any overrun falls according to your main Option.
What decides whether there's anything left to do is why it cost more. A wrong forecast stays as it is. A wrong assumption from the Project Manager, or a new and separate event, is different. For more problems of this kind, see the NEC questions section.
Check these before you give up
- Read the quotation and instruction again. Did the Project Manager state an assumption under 61.6 that has turned out wrong? If so, ask for a correction. It's an event under 60.1(17).
- Look for a new event. Did something else happen after your quotation? Notify it separately. The eight weeks under clause 61.3 is running on it.
- Look for a new instruction. Has the Scope changed again? Later changes are events of their own, under 60.1(1).
- Then take stock of your own position. If it's an overrun only, record the lesson and adjust how you forecast. Don't keep the argument alive by re-presenting it under another name.
- Early warn on the remaining work. If the overrun points to cost or delay yet to come, clause 15.1 may apply.
Who actually pays the overrun
| Main Option | Where the extra cost goes |
|---|---|
| A and B | You bear it. Your payment is based on the Prices, which don't rise |
| C and D | Defined Cost is paid unless it's disallowed, but the target isn't raised. The extra feeds through the share calculation, so you and the Client each carry part |
| E | Defined Cost plus Fee is paid unless disallowed, so the Client bears it. The accepted quotation changes the forecast, not what's paid |
So on Option E, this question rarely hurts the Contractor, while on Option A it can. See how events work under Option A and under Option C.
What's still open, and what isn't
| Why it cost more | Open? |
|---|---|
| You under-forecast the work's duration | No |
| Your own productivity was lower than expected | No |
| A subcontractor's price came in higher than quoted | No, unless a new event caused it |
| A risk you allowed for turned out larger | No. It's a forecast of a risk you carry |
| A stated assumption was wrong | Yes, through a correction |
| A new, different compensation event happened | Yes, as its own event |
| You were asked to do something extra | Yes, through an instruction |
A fictional example
Under Option A, a Contractor's accepted quotation for extra piling is £88,000, assuming the piling rig works five days. It takes eight days because of its own breakdown and a learning curve. Actual cost is £112,000. The £24,000 is the Contractor's; the assessment stands. Had the Project Manager's stated assumption been "ground as in borehole BH4", and the ground turned out different, the correction route would open on that difference.
Same job under Option C: the Contractor's paid the £112,000 plus Fee, but the target rose only by the quotation. The final target position takes the overrun into account.
How the other side will see it
A Project Manager asked to revisit an implemented event will refer to 66.3. It's a strong answer, and it works for both parties: the same clause protects you if the event comes in cheap. See actual cost less than quotation. It isn't unreasonable for them to say no; they're following the contract.
The contract's position is firm. In practice, if an event overran for a reason that really was out of your control, explain it early and look for what the contract actually offers. A general appeal to fairness gives the Project Manager nothing it can act on. To limit this next time, use risk allowances that are reasoned, and ask for assumptions when the unknown is too large. See quoting with unknown facts and what implementation means.
Related guides
- NEC Questions Answered: Real Situations on Site
- Actual Cost Was Less Than the Accepted Quotation: Do We Keep It?
- The Contractor Has Not Submitted a Quotation: What Can the PM Do?
- The PM Keeps Asking for Revised Quotations
- We Cannot Price the Quotation Yet Because Facts Are Unknown
- The Work Is Already Done: How Do We Quote?
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