Compensation events which are Employer risk events under the contract - should put the Contractor back into the same position had the compensation event not occurred. Using Defined Cost in lieu of rates means that a Contractor should be indifferent to the solution as he will be compensated his actual Defined or forecast Cost. This is in lieu of tendered rates and prices which could be high or low and often led to games on the variations issued on traditional contracts.
I tend to think of the calculation of the Prices as resource based estimating with the quotation built up from the principles stated in the SCC or SSCC.
So taking your first paragraph which outlines Clause 63.1 it states that changes to the Prices are assessed as the impact of the compensation event on actual Defined Cost of work done, forecast Defined Cost of work not yet done and the resulting Fee.
Their are no stated rates for People in cost component 1 instead you build up the forecast cost of a person/or grade of person who will be involved with the compensation event at the time when it occurs.
I tend to think of the calculation of the Prices as resource based estimating with the quotation built up from the principles stated in the SCC or SSCC.
So taking your first paragraph which outlines Clause 63.1 it states that changes to the Prices are assessed as the impact of the compensation event on actual Defined Cost of work done, forecast Defined Cost of work not yet done and the resulting Fee.
Their are no stated rates for People in cost component 1 instead you build up the forecast cost of a person/or grade of person who will be involved with the compensation event at the time when it occurs.