We are a contractor working under an NEC3 Engineering and Construction Contract (ECC). When submitting compensation event quotations, we have always included allowances for any risk in our forecast of defined cost. We try to ensure that such allowances are a genuine estimate of the defined cost of risks that have a significant chance of occurring due to the effect of the compensation event. But in assessing compensation events, the project manager often reduces our risk allowance or removes them entirely. We consider this to be unreasonable.
Do you have any guidance on how the contract intends for such risk matters to be allowed for within compensation event assessments? We intend to try to persuade the project manager that how we are pricing the risk allowances is reasonable and should be allowed for in their assessments.