FAQs

In the (original) works information there was a requirement for 10 covers, let us call them type 1 covers. You instructed a change to this both in terms of quantity and specification, so there are now 20 type 2 covers. You should have notified this as a compensation event, but did not. It was instead notified to you by the contractor. So all we need to do now is price the compensation event.
 
That is mainly governed by clause 63.1 but clause 52.1 is also relevant. Clause 63.1 requires you to determine the effect the compensation event has on defined cost. We usually recommend that you think about this using a 'but for' approach. So what would it have cost the contractor to install 10 type 1 covers (today) compared to what will it cost the contractor to install 20 type 2 covers (today)? It does not matter what the contractor did or did not allow in the pricing of the original works. The importance is determining what the cost would have been to the contractor had the original works gone ahead. 
 
You should use current defined cost to price compensation events, which applies to assessing all compensation events whether they are additions or omissions.
 


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