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NEC3 ECC: Damage to the works under a CE instruction

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If a Contractor is instructed to carry out additional works due to a change in the Works Information under clause 60.1.1 and at the point of notification the works have already come to pass i.e. they are to be priced on the actual defined cost incurred; however during the works covered under the additional instruction the Contractor has damaged a part of the works which was underground but knew was there, can they then put this in as defined cost due to the event?

I cannot seem to see a reason to be able to disallow this cost as I do not believe it falls under any of the items of disallowed costs, the remedial works to fix this are not large so I would not suspect them to be recovered through insurance either. However, I do find it strange that there is no obvious mechanism to be able to not allow for a uplift in the Prices due to damage caused by the Contractor as for example defects are paid for under Defined Cost but do not constitute a uplift in the target.

This is an Option C contract.
asked Apr 7, 2016 in NEC3 Compensation Events by CSmallman (210 points)  
   

1 Answer

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My question here is why is this event being assessed under actual cost? If you look at the switch point within clause 63.1 it is the date of the INSTRUCTION that is the boundary between actual/forecast defined cost, not the notification of the CE. Presumably the Contractor had not done any work before the written instruction (why would they contractually?). That being the case, it will allow you to assess the event as a forecast. As you say, the damage is not necessarily a disallowed cost, but it does not need to be part of the assessment which changes the target - which will then be a shared cost in the pain/gain calculation at the end.
answered Apr 7, 2016 by Glenn Hide (29,340 points)