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NEC3 ECC: Can you claim for delay costs in a CE if you are paid on Actual costs?

+1 vote
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I have submitted a CE based on Actual cost, Therefore my Client has removed my delay costs as they believe if the CE is based on actuals then we should base our delay on the current programme, therefore we are not entitled to any delay.
asked Jun 9, 2016 in NEC3 Compensation Events by anonymous  
   

1 Answer

+1 vote
The more interesting question here is why are you basing your CE upon actuals? 63.1 defines how the CE should be assessed and the switch point for when forecast cost should be used rather than actual. It is actual cost up until the point the Project Manager issued the instruction or for other events from when the Contractor notified the compensation event. Most CE's therefore should be a forecast of what would have been reasonable to have allowed for.

Even by agreement I would not recommend you try to assess using actual cost as it is much more difficult to prove than it sounds. If you are assessing actuals (and there are instances where you would - e.g. weather delays will always be based upon what actually happened as you only know retrospectively if they exceeded a 1 in 10 year event) then you need to be able to demonstrate that it affected your planned Completion compared to that on your latest Accepted Programme.  

If you are assessing a CE based upon forecast, it is what would have been reasonable to have allowed (including risk that has a significant chance of occurring) for that event. You would also assess against the latest Accepted Programme if that would have impacted the planned Completion at all and hence apply prelims etc to the quotation as well(and move Completion Date by the same amount).
answered Jun 9, 2016 by Glenn Hide (29,340 points)