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NEC3 ECC: Actual cost of CE is less than agreed - what happens?

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On an asset refurbishment contract under the ECC using Option A, the Project Manager instructs a change to the works information. The change is for some additional works. These works are likely to be carried out in January and the Contractor has allowed for night-time working. The Contractor submits a quotation for £27,000 which is inclusive of an allowance for anticipated poor weather, night-time working, together with is fee. The Project Manager accepts the quotation. In fact work is carried out in March, during the day and also during a spell of fine weather, from records the approximately Defined Cost plus Fee for this work was approximately £20,000.

How much is the Contractor paid for the work and what are the relevant clauses covering this.?

How much would the Contractor be paid for this work if it were an Option D contract instead?

If additional works are carried out before the compensations event is agreed, is the Contractor paid a reasonable sum in the next assessment?

During the construction of these additional works and before Completion the Supervisor discovered a Defect and notified this to the Contractor who corrected it immediately. Is the correcting of the Defect a recoverable cost in Option A?

If the Defect was not corrected by an assessment date before Completion, how much would the Contractor be paid for the work?
asked Mar 26 in NEC3 General by Kim   1

1 Answer

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Clause 65.2 states that "the assessment of a compensation event is not revised if a forecast upon which it is based is shown by later recorded information to have been wrong". Therefore under main Option A the Contractor is paid £27,000 when the additional works are complete.

Under main Option D, in order to calculate the Contractor's share (clause 53.5) the Total of the Prices (needs to be calculated in accordance with clause 11.2(33), so the compensation event would be remeasured based on work completed which could be less or more than the original £27,000.

Remember in Option D, the risk of changed quantities in the Bill of Quantities is the Employer's. The Contractor would be paid the Defined Cost plus Fee of £20,000, plus / less any share, however the amount of share is not calculated against individual compensation events, it is done globally for the contract.
answered Mar 27 by Neil Earnshaw (3,420 points)