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NEC3 ECS: Removing work and giving it to someone else

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Under the Engineering and Construction Subcontract the Contractor may give an instruction changing the Subcontract Works Information to remove/reduce the scope of work. This is a CE 60.1(1); quotations are submitted, assessed and implemented. So far so good. Everyone's happy.

The Contractor then decides he is going to give that work to AN Other to complete. In general terms this would be a breach of subcontract by the Contractor and the Subcontractor would be entitled to damages.

A breach of subcontract is a CE under 60.1(18), and as a CE the rules under 63.1 have to be followed -  how would the Subcontractor be able to recover damages (loss of profit etc) following these rules?
asked Jan 25 in NEC3 Compensation Events by Dave Coates (140 points)  
   

1 Answer

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A really interesting question.

First off, I am not sure that the right remedy here really is a CE (despite the contract saying that CEs are the only remedy that is not necessarily the case). Importantly this type of breach can very easily amount to a repudiation of the contract (that is the contract being terminated in whole) it will depend on the severity of the breach, ie how much of the contract has been removed and re-let.

You could look at this under the CE process. However, you are quite right that the terminology is difficult to apply in the circumstances. Putting aside what the contract says, what you want to include is the Fee element on the work wrongly removed and given to others plus (I would add) any "risk" allowance arising from your ability to re-allocate/assign people and equipment.
answered Jan 27 by Rob Horne (9,030 points)