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Answered: NEC ECC: Liability for item that may or may not be a weather event or CE?

August 19, 2019, 2:32 am
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Answered: NEC ECC: Option A/C Contractor wording Employer Works Information and resultant changes

August 19, 2019, 3:24 am
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Works Information is a defined term and;

 - specifies and describes the works or
 - states any constraints on how the Contractor Provides the Works

Essentially this means that you tell the Contractor what you want them to do and also state any particular ways in which you want this done.

The Works Information is an important contract document and plays a key part in certain contract procedures, such as deciding when Completion has occurred and whether a matter constitutes a Defect.  Consequently it should be as precise and unambiguous as possible.

The best advice is really to take ownership of this document, using completed contract works as a 'learning experience' .  There is an NEC guidance document available on how to write Works Information if you need any assistance.
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Answered: NEC ECS: Agreed reduction for early payment

August 19, 2019, 5:35 am
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Jon is right - but given this is likely to be for a very small amount then you would like to think you can both find a way just by mutual agreement. You could by agreement make it fit a negative CE, or under NEC4 you could use a Contractors proposal equivalent to value engineering.
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Answered: NEC ECC: Is the Contractor able to refer to a dispute?

August 19, 2019, 6:24 am
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Yes, the Contractor can : that is what the dispute procedures are there for !

Do note that implied within clause 60.1 (8) is the ability for the Project Manager to change a decision previously communicated to the Contractor. However, the PM would presumably not change his or her mind unless the Contractor had presented a clear case for why he or she was wrong: I had one where the PM had not turned the page on the Contractor's programme thus giving him only 3 weeks extra rather than 17 weeks when you worked through the full logic.

Perhaps call an early warning meeting discuss.
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Answered: Is this legitimate cost under the contract and should it be paid?

August 19, 2019, 6:30 am
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By the 'Project Team', I assume you mean the Client and Contractor teams.

So firstly, the Client's team should not be counted as Defined Cost as they are not employed by the Contractor as per the opening bullet points of People in the full Schedule of Cost Components.

However, for the Contractor's team, it could be argued that it is "subsistence" as per People 13(b) of both NEC3 & NEC4 ECC. However, "subsistence" implies support at a basic level so, for instance, a £100 per head slap-up meal is almost certainly over the top, but a reasonable sum would. I'll leave you to argue over what a reasonable allowance would be.
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Answered: NEC3 ECC: Main contractor not supplying a revised program or dates, for the subcontractor to issue a program foe acceptance.

August 20, 2019, 3:59 am
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It very much depends on what main option of the ECC (or ECS?) you are working under as to whether you are entitled to any additional payment. By the sounds of things, the Contractor is advising that what you have issued does not constitute a notification of a Compensation Event.

Whilst you may have submitted several EWN's, this in itself won't (necessarily) mean that you are entitled to any additional payment.

If for instance, you are working under option A, you will have to follow the procedure in core clause 6 in order that a CE is implemented before you are entitled to receive any additional payment as a result of a CE i.e from notification to quotation to implementation.
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NEC ECC: Liability for item that may or may not be a weather event or CE?

August 19, 2019, 12:42 am
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NEC option A contract. Traditional contract no contractor design. Contractor builds road and batters either side in accordance with the Works information. The Works have been given technical approval by the highways department. We have very heavy rain and water pours down the batters and causes significant damage. The Contractor raises an EWN and follows up by notifying a compensation event. The PM asks for the Contractor to provide weather records to substantiate that they are entitled to a compensation event if rainfall exceeds 1 in 10 year average. Contractor argues that there is insufficient drainage at the top of the batter and the local authority agree! The PM instructs the engineer to assess if their design is adequate (possible PI issue). The PM (initially assuming the design is not defective) advises the Contractor that they are responsible for temporary works/protection of the Works and need to offer the completed Works at completion and it is their risk unless demonstrated that this is a weather event.
The contractor argues they have only built in accordance with the Works information and this event would happen in the future and they feel it is reasonably for them to complete Works prior to completion and it isn’t fair they are responsible if the design isn’t fit for purpose. The PM sympathises but isn’t sure if their is a contractual mechanism to issue a compensation event until it is proved this is a weather event or until it is agreed that this is a defective design.

Question: is the contractor entitled to payment for remedial works and loses and expenses as this event is to delay the contract? The PM feels the Works must be offered by the Contractor at completion but currently doesn’t know if this is actually a defective design. The Contractor is awaiting instruction???
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Answered: NEC ECC: Instruction to stop as a result of a risk the Contractor owns

August 21, 2019, 2:29 am
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Don't forget whilst an instruction to stop work is a compensation event, you would not notify it as being a compensation event. If the Contractor notifies that it is a compensation event, the PM can then apply the first bullet of 61.4 stating that this is an event arising from the fault of the Contractor and therefore there will be no changes to the Prices or Completion Date.
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Answered: NEC AC: What are the limitations of using the NEC4 Alliance Contract as a Framework?

August 23, 2019, 4:33 am
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In many ways the NEC4 ALC contract is designed to be even more collaborative than other forms of contract, as it is based upon a different contractual arrangement whereby the main parties to the project, including the Client, are Partners.

The NEC4 ALC contract reflects the general characteristics of an alliance, including; a collaborative and integrated team, a collective leadership (Alliance Board consisting of all the Partners), mutual risk sharing and a commitment to 'no disputes'.

The Client is required to produce the Scope, Client's Requirements, Implementation Plan and Performance Table.  These documents, especially the Performance Table, provide for financial risk and reward to each of the Partners.

A framework arrangement does not guarantee collaboration, but the principle is that it encourages a better working relationship, due to the longer time period and likelihood of a continued pipeline of work, so by default should encourage a collaborative approach.

An NEC4 ALC contract requires careful planning and consideration at the outset and also a very professional Alliance Manager, who's duties and responsibilities are far more wide ranging, than a Project Manager / Service Manager etc.

The Alliance Board decisions are subject to unanimous decision making, so agreement is required from all Partners (except for limited actions by the Client).

Ultimately, however, the level of collaboration comes down to the relationship between the parties which heavily relies on personal attitudes of key people which a contract can only go so far to encourage.
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NEC PSC: Expenses recovered through audit and actual costs?

August 23, 2019, 11:54 am
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On dealing with expenses under PSC option E, only those set out in the optional statements are recoverable?, anything else is deemed part of the staff rates? Is the payment of expenses at the rates in the subcontract data or the actual receipted expense? I presumed the latter - due to clause 52.2 and what an expense actually is, however i've read contradictory views.
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NEC PSC: Option E staff rates

August 23, 2019, 11:54 am
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Aside from the named Key People, the staff rates were included as categories/ roles due to the services being carried out by a larger number of staff. No CVs were issued for those people (or requested) and nor were the key people replaced. We are now being asked to demonstrate that the staff charged to the project under each 'category' or 'role' are actually employed in that same role. Why is this relevant? if the services have been delivered and all obligations met, then the 'role' commands that rate? the records are there all signed and counter signed too.
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Answered: NEC 4 ECC : Option A - quotation from an early warning?

August 24, 2019, 3:07 am
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The very fact that a quotation is being requested suggests that this is a compensation event (or why ask for a quotation). That is why using one of these on line administration tools (e.g. FastDraft) for managing NEC contracts is so good as it forces you to follow the correct process. The only way to ask for a quote through the system and in accordance with the contract is via clauses 61.1, 62.1 or 65.1. There should never be the need for a quotation directly off the back of an early warning.

As Dave suggests - follow the correct contractual process so you both know where you stand and everything is fully auditable.
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Answered: NEC ECC: Option C Risk in CE quotes.

August 24, 2019, 3:11 am
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A fixed percentage for risk does not generally work. If you are installing a new pipe run - the risk will vary depending on if it is in shallow ground or deep ground, or being dug in summer or winter. Therefore risk should be taken on face value on each occasion. It will be subjective rather than definitive, but the Contractor will just have to justify as much as they can that the risk applied is sensible and realistic.
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Answered: NEC ECC: When does 'pro active risk mitigation' become 'change'

August 25, 2019, 11:46 pm
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It depends on how you communicated your idea. If you suggested the alternative method, then it is up to the Contractor to decide on how to manage that risk. If you INSTRUCTED as the Project Manager to do something a certain way and they believe they could have achieved the requirements of the Works Information with their method of working, then the additional cost your instructed method has caused will now be a compensation event.
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Answered: NEC ECS: Period For Reply in CD vs Timescales within Clause 60

August 26, 2019, 11:17 pm
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Clause 13.3 states; 'If this subcontract requires the Contractor or Subcontractor to reply to a communication, unless otherwise stated in this subcontract, he replies within the period for reply'.

Assuming your subcontract has not been amended, then if a specific timescale is stated, such as within the compensation event procedure, then this timescale would apply instead of the period for reply.

Therefore, the Contractor has 2 weeks to reply to a CE notification.
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Answered: NEC PSC: Expenses recovered through audit and actual costs?

August 27, 2019, 12:36 am
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The expenses set out in Contract Data Parts 1 and 2 determine 'what' expenses are recoverable, including the amounts, where applicable, such as mileage allowance for travel by car.

When you say 'rates in the ... data or the actual receipted expense' I presume that an amount is expressly stated for a particular type of expense in the Contract Data, with a corresponding actual amount incurred against this.  The amount paid would depend upon whether the Contract Data stated an 'actual amount', such as car mileage allowance, in which case that would be used as the basis for an expenses calculation.  Similarly you would pay for staff at the staff rate stated in the Contract Data, rather than the actual cost.  Likewise under ECC main option E you would assess the cost of Equipment using the rates in Contract Data Part 2, where applicable.

Clause 52.2 requires an auditable trail of evidence to be kept and maintained so that the requirement of 'expenses properly spent' at clause 50.3, can be demonstrated and confirmed, for the purposes of a payment assessment.  This clause, relating to expenses, applies to all the main PSC options.
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NEC ECC: Clause 34.1 stop any work

August 27, 2019, 4:57 am
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Can a PM instruction under Cl. 34.1 be given which relates to a specific area or element of work? I get that this is somewhat basic but just wanted to check!

Secondly, if on an option C contract a PM instruction is given to stop work in a specific area, and this is as a result of the fault of the Contractor, if standing time of plant & other resources results, can this be considered a Disallowed Cost? If so what item under 11.2(25) is this covered by?
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Answered: NEC ECC: Clause 34.1 stop any work

August 27, 2019, 11:43 pm
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An instruction can apply to 'any work' although this is not defined, presumably so as not to limit the scope of what can be instructed

If under a main option C (or D or E), then, depending upon what work is the subject of the instruction and how long the period of 'suspension' is for, then the issue of Disallowed Cost may apply.  The most likely application is in relation to 'resources not used to Provide the Works', (Equipment and People) although this should take into account 'reasonable availability and utilisation'.

My interpretation of this Disallowed Cost clause, however, relates to the fundamental reason for a resource being on Site, rather than just a measure of efficiency, as the 'efficiency measure' is addressed by the share mechanism and the PM can also request the removal of a person.

The issue of 'fault' would be relevant to whether the matter constituted a compensation event, rather than an assessment of Disallowed Cost.
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Answered: NEC4 ECC: Reviewing a delay due to CE - when should the delay be applied?

August 28, 2019, 9:29 am
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It should be applied at the point it will be applicable. If you are going to deny access for 14 weeks which will delay the remaining works the CE would be for the next 14 weeks moving out the original works and the planned Completion by 14 weeks. If you are instructing additional works that will involve 14 weeks additionally at the end then the 14 week delay is at the end. Where ever it is applied, you assess the impact upon planned Completion and the direct cost that will be incurred.

If the delay means the whole project team will be on site delayed for 14 weeks (and the Contractor can not mitigate in anyway) then it will be the full 14 weeks prelim costs that should be included. If it is 14 weeks extra at the end when the prelim cost will already be lower as the resources and site cabins would have been depleted at that stage then the prelim type costs included within the CE quotation will be less in comparison.
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Answered: NEC ECC: Clause 45.2 - non access to correct defect

August 29, 2019, 12:22 am
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The clue is in the words in this clause 45.2 as opposed to 45.1 I.e.  "the cost to the CONTRACTOR of correcting the Defect" where as in 45.1, it is the cost to the Employer.

So you should demonstrate to the PM why it would cost you this amount and point out the difference between 45.1 and 45.2.
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