9.
10.
CONFIDENTIAL
5.
The Civil Consortium's view is that for the reasons already
suggested, it is impossible to assume any meaningful ceiling
price at this stage and it wou'd be a prodigal waste of
resources to embark on the exercise of design and pricing,
as suggested by the Steering Group, unless one was confident
that a satisfactory result could be achieved. Carrying out
this work would have an extremely serious effect on the
ability of all the member companies to seek alternative
Failure on the Mass Transit bid would then
contracts.
be extremely damaging to each member's business.
The Civil Consortium believes that any Contractor who
offers a ceiling price in accordance with the Sequence of
Events proposed by the Steering Group must add very large
sums in an attempt to cover all the unknown factors, risks,
escalation and contingencies. This may lead to his making
a very large profit and the Client paying more than he need.
Conversely and perhaps more likely the sums he has added
will prove inadequate and because of the size of the project
he will be forced to withdraw from the contract or be driven
into liquidation, leaving the Client with an unfinished
project and all the ensuing problems of unquantifiable
delays and cost overruns.
11.
We can only repeat that we believe the Target form of
Contract to be the best for this project. If we are
successful in negotiating this type of Contract with the
Steering Group we would, of course, be prepared to co-
operate with your Consulting Engineers in carrying out
..../Continued