Answered: NEC PSC Time Charge - Removal of Scope item not yet started

It is a feature of NEC contracts that the starting point for the evaluation of compensation events is cost rather than rates and prices, even where the contract is one based on rates and prices.

So, when you remove work (whether under the PSC or the ECC) you value that as a compensation event, albeit a negative one. The valuation is based on the Time Charge principle of hours incurred (or here would have been incurred) at the relevant rates. If the Consultant had included more or less allowance against this items in the Activity Schedule is irrelevant, it is the Time Charge which is deducted, and under 63.12, removed from the Prices.

The question then is how much time should properly be spent, at what rates, to deliver the service now being omitted. Once calculated that is the value of the negative compensation event and the reduction in the total of the prices. If a value other than the amount in the Activity Schedule is generated you will end up with a balancing payment, one way or the other, once the services have been fully delivered, as interim payments will be based on completed Activity Schedule item values.