Yes - this would be a compensation event, and more importantly no contractual clause that says "unless you changed your method of working".
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Answered: NEC ECC: Contractor change to Works information
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Answered: NEC ECC: Hazardous Waste
You don't specify here but I assume you are at tender stage and not yet signed your contact. If that is the case then I don't think it matters what specific terms you use in any "qualification" or "clarification" as long as it makes it very clear what risk you have not priced for, and that any such clarifications then make the signed contract (or even better converted into a contractual element such as added as an express Employers risk in contract data 1).
If you are under contract already and are talking here about risk within a compensation event, then you need to get the Project Manager to state assumptions about the issue in question to caveat that risk, otherwise assume the worst case and price the risk - which will then give rise to further discussions in the requirement for any revised quotation.
If you are under contract already and are talking here about risk within a compensation event, then you need to get the Project Manager to state assumptions about the issue in question to caveat that risk, otherwise assume the worst case and price the risk - which will then give rise to further discussions in the requirement for any revised quotation.
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Answered: NEC ECC: Acceptance of contractor's latest submitted Cl32 programme vs previous submission
Absolutely they can. There may have been fundamental issues that have now been corrected which has led to Feb being accepted. Jan will remain unaccepted.
You could go back and try to amend the Jan programme to get a revised version of that programme retrospectively accepted but it serves little purpose and you can make better use of your time/resources. The only issue then is you have a two month gap (assuming the Dec programme was accepted) in order to assess compensation events that occurred then which might now be a little bit more subjective.
You cant turn the clock back now, but much better would have been to revise the Jan programme within a day or two of it being rejected and then sit down with the Employer to explain the changes made and if there is anything else wrong, to get a revised version then still accepted in January.
You could go back and try to amend the Jan programme to get a revised version of that programme retrospectively accepted but it serves little purpose and you can make better use of your time/resources. The only issue then is you have a two month gap (assuming the Dec programme was accepted) in order to assess compensation events that occurred then which might now be a little bit more subjective.
You cant turn the clock back now, but much better would have been to revise the Jan programme within a day or two of it being rejected and then sit down with the Employer to explain the changes made and if there is anything else wrong, to get a revised version then still accepted in January.
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Answered: NEC ECS: In an Option C subcontract, when is the Pain/Gain assessment made & paid?
The Project Manager makes a preliminary assessment at Completion, which is then included in the next amount due the following period. There is a final assessment made within the final total of the Prices - which will be made at the end of the Defect Date where all the final costs will know be known.
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Answered: NEC ECC: The correct application of Direct Fee % in a Compensation Event
It's hard to give an absolute answer as you do not say whether you are under NEC3 or 4 and which main option you are under and hence which Schedule of Cost Components you are using. Reading between the lines, I am making an educate guess that you are under NEC3 ECC option A or B. Is that correct ?
From what you have said, it therefore appears that the Contractor has correctly applied the percentage for design overheads, the percentage for people overheads and the percentage for adjustment for Equipment in the published list and then correctly applied his direct fee percentage (assuming he is doing the work himself).
From what you have said, it therefore appears that the Contractor has correctly applied the percentage for design overheads, the percentage for people overheads and the percentage for adjustment for Equipment in the published list and then correctly applied his direct fee percentage (assuming he is doing the work himself).
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Answered: NEC ECC: Terminal Float against Key/Sectional Completion Dates
Yes and the contract actually states that.
Clause 63.3 states that if a CE moves planned Completion then Completion Date moves by the same amount i.e. Contractor owns terminal float. This then repeats the same sentence for Key Dates, and X5 states that where ever the contract states "Completion" then read "Sectional Completion".
Clause 63.3 states that if a CE moves planned Completion then Completion Date moves by the same amount i.e. Contractor owns terminal float. This then repeats the same sentence for Key Dates, and X5 states that where ever the contract states "Completion" then read "Sectional Completion".
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Answered: NEC ECS: Option A Subcontractor refusing to breakdown hourly rates
If they are not willing to break these rates down then you could assess it yourself using what you consider to be open market rates (or threaten to do this and see if it gets a different reaction to being more willing to show evidence).
They are obliged to break the quote down in sufficient detail to allow you to decide whether it is the right cost, otherwise you have the right to assess it yourself if you don't think it has been assessed correctly (in accordance with the contract).
They are obliged to break the quote down in sufficient detail to allow you to decide whether it is the right cost, otherwise you have the right to assess it yourself if you don't think it has been assessed correctly (in accordance with the contract).
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Answered: NEC ECS: Is there a limit to the change in scope that can be instructed under the contract?
Let's take this question in generality first : your contract is deliver to deliver the 'works' (in italics). So, to take a real life example, if the 'works' were for 'The construction of X' and then the Employer wanted to add in design, you would have a very good argument for saying something like "No, the scope of my contract is for 'construction of X' and does not include design, so I don't have to do it."
However, in the legal interpretation of a contract, detail over-rides generality, so if the original Works Information (the detail !) already had some design in it, you would not be able to sustain an argument that you didn't have to do the pre-existing design. If the PM instructed new work of a similar nature was introduced for which the Contractor had to do similar amount of design, then the Contractor would probably still have to do it. But if new work was introduced which had greater levels of design or was of a different nature, then it would become more subjective.
In your subcontract, from what you say, it seems that the Contractor is instructing work for which there were specific exclusions so the understanding of the Parties was that these were NOT within the definition of the 'works'. But the big Question for me, is what legal status do these exclusion have i.e. were they written down ? In which document - form of agreement, subcontract data, Works Information (Contractor's or Subcontractor's) etc. Without knowing this, it is hard to give a definitive answer.
However, in the legal interpretation of a contract, detail over-rides generality, so if the original Works Information (the detail !) already had some design in it, you would not be able to sustain an argument that you didn't have to do the pre-existing design. If the PM instructed new work of a similar nature was introduced for which the Contractor had to do similar amount of design, then the Contractor would probably still have to do it. But if new work was introduced which had greater levels of design or was of a different nature, then it would become more subjective.
In your subcontract, from what you say, it seems that the Contractor is instructing work for which there were specific exclusions so the understanding of the Parties was that these were NOT within the definition of the 'works'. But the big Question for me, is what legal status do these exclusion have i.e. were they written down ? In which document - form of agreement, subcontract data, Works Information (Contractor's or Subcontractor's) etc. Without knowing this, it is hard to give a definitive answer.
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Answered: NEC PSC: What is the risk to Consultants under option E for defects i.e. can costs be disallowed?
In NEC3 PSC the concept of Time Charge is used instead of Defined Cost, Fee and Disallowed Cost. Time Charge is a defined term at clause 11.2(13), the part of this relevant to this discussion is "... total staff time ... properly spent on work in this contract".
Use of the term "properly spent" introduces some subjectivity. Using your example of having to do a piece of design twice, the question to ask is why was it necessary to do it twice, i.e. who's fault was it? The Consultant's obligation at clause 21.2 "...is to use the skill and care normally used by professionals providing services similar to the services". So I'd suggest that a failure to supervise staff properly, or to follow QA procedures to check calculations, or to check that the design complied with the required standards etc would all fall below the standard required and not be paid. A member of staff taking twice as long to do something as is reasonable would also fall below the standard required. This doesn't mean that the Employer does pay for some level of inefficiency, however they are protected from incompetence and unprofessional behaviour.
Interpreting the meaning of these clauses is by no means simple and straightforward, and will vary from contract to contract. The Parties should try to apply some common sense to resolve the matter. If the design had to be done twice , and the reason wasn't a compensation event, what was the real reason behind this and how reasonable was it? What was the scale of re-designed element in the context of the whole design? The right answer will hinge on the specific facts and circumstances.
Use of the term "properly spent" introduces some subjectivity. Using your example of having to do a piece of design twice, the question to ask is why was it necessary to do it twice, i.e. who's fault was it? The Consultant's obligation at clause 21.2 "...is to use the skill and care normally used by professionals providing services similar to the services". So I'd suggest that a failure to supervise staff properly, or to follow QA procedures to check calculations, or to check that the design complied with the required standards etc would all fall below the standard required and not be paid. A member of staff taking twice as long to do something as is reasonable would also fall below the standard required. This doesn't mean that the Employer does pay for some level of inefficiency, however they are protected from incompetence and unprofessional behaviour.
Interpreting the meaning of these clauses is by no means simple and straightforward, and will vary from contract to contract. The Parties should try to apply some common sense to resolve the matter. If the design had to be done twice , and the reason wasn't a compensation event, what was the real reason behind this and how reasonable was it? What was the scale of re-designed element in the context of the whole design? The right answer will hinge on the specific facts and circumstances.
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Answered: NEC ECC: Specified material now on long lead time - is this a CE?
The only one it could possibly fall under is clause 60.1 (19) and this assumes that, as well as satisfying the last 3 bullets, it stops you achieving the Completion Date. I.e. the delay is so significant that it uses up all your terminal float and time risk allowance.
Good luck !!!
Good luck !!!
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Answered: NEC ECC: People Costs Allowance Within the Fees
What is in your fee is actually irrelevant.
To assess whether you get anything extra for a CE, you have to demonstrate the change in Defined Costs due to the CE. So if the QS is based in the Working Areas for 5 days a week and has to work a bit late due to a CE, but doesn't get any over time, then there would be no effect.
To assess whether you get anything extra for a CE, you have to demonstrate the change in Defined Costs due to the CE. So if the QS is based in the Working Areas for 5 days a week and has to work a bit late due to a CE, but doesn't get any over time, then there would be no effect.
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NEC ECC: Option C tender information
Option C Tendering - received a TQ answer; excl. the Provision of a detailed programme before and during the Contract - I'm under the impression this makes much of Option C irrelevant?
Additionally the client provided an indicative Pricing Schedule, to be filled out and submitted during the tender process, this feels more akin to an Option D contract.
Additionally the client provided an indicative Pricing Schedule, to be filled out and submitted during the tender process, this feels more akin to an Option D contract.
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Answered: NEC ECS: Can a Contractor reduce/descope and request a requote on a previously implemented CE on a a Target Cost if that CE Works have commenced?
Yes they can instruct a new CE to reduce the hoarding they want. However you then get to assess the cost saving of not providing the hoarding. If for example you have already bought all the materials and can not get any refund then you would not reduce the cost by the material cost you have incurred. You work out the cost of what the 25% will cost to install, add any cost you have already incurred and then deduct that from the £100k and the difference will be the saving you offer. You may well be able to prove that not doing 75% of the work may still cost 50% of the original quote - but of course you have to justify that otherwise they will assess it themselves.
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Answered: NEC ECC: Option C tender information
I'm assuming that the response to the TQ related to the detail of the programme rather than the programme itself.
You need to be careful as answers to TQ's may not apply 'post contract' due to the 'entire agreement' clause (12,4), unless the conditions of contract have been specifically amended at clause 31.2 to reflect this.
It is actually quite common for a Client to provide an activity schedule with the tender documentation under main options A and C, although bear in mind that, as the Contractor, you have responsibility for the completeness and accuracy of the activity schedule so don't just rely on what has been provided.
You need to be careful as answers to TQ's may not apply 'post contract' due to the 'entire agreement' clause (12,4), unless the conditions of contract have been specifically amended at clause 31.2 to reflect this.
It is actually quite common for a Client to provide an activity schedule with the tender documentation under main options A and C, although bear in mind that, as the Contractor, you have responsibility for the completeness and accuracy of the activity schedule so don't just rely on what has been provided.
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Answered: NEC ECC: Termination for any reason
It doesn't expressly state what the reason might be, although it wouldn't include one of the other specified reasons.
Where the Employer terminates for 'any (other) reason' the Contractor is paid amounts due A1 A2 and A4, with A4 essentially including 'lost profit', so the Contractor doesn't 'lose out' from whatever reason the Employer has used to terminate.
Whether it is 'fair' or not doesn't take away from the fact that the Employer is entitled to exercise this right under the contract.
Where the Employer terminates for 'any (other) reason' the Contractor is paid amounts due A1 A2 and A4, with A4 essentially including 'lost profit', so the Contractor doesn't 'lose out' from whatever reason the Employer has used to terminate.
Whether it is 'fair' or not doesn't take away from the fact that the Employer is entitled to exercise this right under the contract.
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Answered: NEC ECC: Does the Project Manager have to be a named individual?
There is nothing to stop an organisation being named but it is strongly advised/good practice to name an individual who can then further delegate powers (in writing) to others so it is clear specifically who is authorised to give what instructions/notifications/acceptances.
The problem with an organisation is that anyone has equal power to act in accordance with the contract which can come with its practical problems.
If you are using on online administration tool (such as FastDraft) to manage the flow of communication then that will largely sort itself out as only certain people will be authorised within the platform to be able to write and issue instructions and/or acceptances.
The problem with an organisation is that anyone has equal power to act in accordance with the contract which can come with its practical problems.
If you are using on online administration tool (such as FastDraft) to manage the flow of communication then that will largely sort itself out as only certain people will be authorised within the platform to be able to write and issue instructions and/or acceptances.
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Answered: NEC ECS: Can costs be claimed back under 25.2 for poor performance
No. But what you could do is notify the outstanding works as Defects - a part of the works not in accordance with the Works Information, whereupon they have the defects correction period to correct it. If they fail to do it in this time, then clause 45.1 kicks in (assuming it is NEC3)
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Answered: NEC ECS: Option A - Procedure for a sub-contractor to terminate contract due to insolvency
You need to ensure you follow the procedures described in the termination provisions, if you fail to do so then it could be classed as a repudiatory breach of contract which may affect the amount you can recover from the Contractor or worse still enable them to claim damages. Note that you are NOT terminating the contract, merely your obligation to Provide the Subcontract Works, certain provisions of the contract will survive the termination.
Firstly you need to notify the Contractor in accordance with clause 90.1 and give details of your reason. The reasons are all stated at clause 91, presumably the ones that apply to you are the ones at R1 to R10 under clause 91.1. Be careful to terminate for the correct reason otherwise again you risk committing a repudiatory breach of contract.
You then need to ensure you follow the appropriate procedures under clause 92 and clause 93 sets out what payment you are entitled to.
I can't stress enough how important it is to stick to the letter of the contract when instigating a termination.
Firstly you need to notify the Contractor in accordance with clause 90.1 and give details of your reason. The reasons are all stated at clause 91, presumably the ones that apply to you are the ones at R1 to R10 under clause 91.1. Be careful to terminate for the correct reason otherwise again you risk committing a repudiatory breach of contract.
You then need to ensure you follow the appropriate procedures under clause 92 and clause 93 sets out what payment you are entitled to.
I can't stress enough how important it is to stick to the letter of the contract when instigating a termination.
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Answered: NEC ECS: Can costs be claimed back under 25.2 for poor performance
If you have certified Section Completions, or should have certified them - see definition of Completion at clause 11.2(2) - then you will struggle to justify why you should be entitled to claim your losses as a result of the Subcontractor not completing.
If this hasn't happened then you'd still have the right to recover delay damages from them.
In choosing to use delay damages you made a decision that means you cannot now pursue the Subcontractor for your losses as a result of their delay.
Usually use of sectional Completion means there would be a stated damage per day for each section as well as one for the remainder of the works and these are your remedy for delays caused by the Subcontractor.
If you want to recover any cost under clause 25.2 you will need to demonstrate that the Subcontractor has not provided something that the Subcontract Works Information required them to provide. It sounds like that may not be the case here, merely that they aren't doing it as quickly as you'd like. You can't force them to finish "on time", they are allowed a "reasonable time" to complete even if this means they are going to be "late". In the NEC your remedy isn't being able to force them to be "on time", it is X7 damages or if you hadn't used them you'd have to pursue your losses outside the contract.
If this hasn't happened then you'd still have the right to recover delay damages from them.
In choosing to use delay damages you made a decision that means you cannot now pursue the Subcontractor for your losses as a result of their delay.
Usually use of sectional Completion means there would be a stated damage per day for each section as well as one for the remainder of the works and these are your remedy for delays caused by the Subcontractor.
If you want to recover any cost under clause 25.2 you will need to demonstrate that the Subcontractor has not provided something that the Subcontract Works Information required them to provide. It sounds like that may not be the case here, merely that they aren't doing it as quickly as you'd like. You can't force them to finish "on time", they are allowed a "reasonable time" to complete even if this means they are going to be "late". In the NEC your remedy isn't being able to force them to be "on time", it is X7 damages or if you hadn't used them you'd have to pursue your losses outside the contract.
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NEC ECC: Can the client limit payment to agreed target value only on option C.
We are working on an NEC3 Option C with numerous CEQ's submitted but most not agreed. The Client have implied that they are behind but equally, they have been advised by us that they are 'out of time'. We have not signed the Contract as yet, due to it arriving after the works had commenced and there being many queries raised against it. They finally responded but now I have joined the company and am looking at it.
They have hinted that the contract states, they will not pay over the agreed target for defined cost plus fee but assure us that they would not do that. I am unable to find the clause in their contract but they refer to Z clauses that are nowhere to be seen. Should I assume it's in the missing Z clauses they refer to, or is it hidden elsewhere and I just can't see it. There are a lot of amendments to the main contract and it's taking a lengthy amount of time to go through them. Now under pressure to get this signed and back to them.
They have hinted that the contract states, they will not pay over the agreed target for defined cost plus fee but assure us that they would not do that. I am unable to find the clause in their contract but they refer to Z clauses that are nowhere to be seen. Should I assume it's in the missing Z clauses they refer to, or is it hidden elsewhere and I just can't see it. There are a lot of amendments to the main contract and it's taking a lengthy amount of time to go through them. Now under pressure to get this signed and back to them.
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