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NEC3 ECC: Employer works elsewhere affecting the project - is this a compensation event?

+1 vote
191 views
Employer is a knowledgeable client operating multiple sites and their assets effectively require 365 days / 24 Hour operation. The Contractor is equally familiar with the Employers business.

It’s an ECC Contract Option C and the Contractor is diligently ‘providing the works’ on one of the Employers sites

The Employer has elected to undertake work on their own assets in a nearby location. Employer could have readily identified to the Contractor that he was undertaking some work, reason why and how long it might take, and what might / might not occur (i.e. by means of an early warning etc - or even a chat over a cup of tea.) but didn't.

Whilst the Employer was doing their work, an event occurred that affected the Contractor’s ability to provide the works, in essence the event caused delays and increased the costs for the Contractor .

Contractor says to Employer:

a)    You could have warned us you were doing some work – and you didn’t
b)    You could have raised an Early Warning (c16) or discussed this and you didn’t
c)    What has happened has increased the cost of our ‘providing the works’ and it’s delayed the completion
d)    This is an Employers Risk Event (c80) i.e. something that flows from actions of the Employer etc
e)    The Contractor raised an Early Warning and stated they want a Compensation Event.

Employer and Project Manager says:

a)    Appreciate we didn’t tell you, sorry
b)    Yes, we are very sympathetic that this has cost you money but….
c)    You’re not getting any money because “whilst we didn’t raise an Early Warning, or tell you about what we were doing, you as Experienced Contractor could have asked the question to find out if we were doing any work that might affect your works… and you didn’t”.

The questions are..

Do you think the Employer / Project Manager are operating the contract correctly?

Do you think the Employer should issue a Compensation Event?

Observations welcome - to put this in context - value is circa £120k
asked Jul 2, 2016 in NEC3 Compensation Events by drewtoncrane (140 points)  
   

1 Answer

+1 vote
I think your observations, the way you have described it, are entirely valid, except for the compensation event heading you describe.

Events in clause 80.1 are compensation events via clause 60.1 (14). However, you don't describe the circumstances specifically enough or point to the bullet point in clause 80.1 which you think the event corresponds with. Consequently, while you might be right, I am a bit dubious.

It seems more likely to me that it will one of the other compensation events in clause 60.1 (1), where the Employer or Other have or have not done something. This could include an effective change to a constraint in the Works Information and so be a compensation event under 60.1 (1). However, with out knowing what the tangible actual event was, I cannot say precisely.
answered Jul 3, 2016 by Jon Broome (17,170 points)