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NEC ECC: The Contract is late and LDs may be levied - the PM has instructed a change!

+1 vote
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From what I remember of the 'good' old days under the ICE, if a contract had overrun and the Contractor was due to be levied LDs, but then the Employer issued further work the Contract Completion date moved to the date that this new work was completed.  We are currently working on a Contract running 5 months late and although the subject has not been broached, we expect to have LDs levied against us.  
The PM has issued an instruction for a change to the fencing/gates.  This could have been issued earlier, maybe before completion last December, as it did not require the outstanding work to be completed before the new instruction could come about.
Therefore my question is - does the Completion Date jump to when this newly instructed work can be completed?  Thus denying the Employer from levying LDs!
asked May 23 in NEC3 General by philiphales (410 points)  
   

1 Answer

+1 vote
No!

If there is a new compensation event - you see if this affects planned Completion further, and if so you move Completion date by the same amount. If this fencing does not change planned Completion, then Completion Date does not change and the Contractor is still liable for delay damages.
answered May 23 by Glenn Hide (30,990 points)  
I feared this may be the case, thanks for the quick response.
A slight change on another Contract.  The works are finished - we are on site completing defects.  The Contract completion date is Monday 15th May.  We completed the works on Friday 19th May.  Therefore there are 4 days of LDs.  The PM has asked for a quotation for some additional works (a change to the WI) - I put together a quote for £2K, but stated this work being 2 days worth should move the Contract Completion date to the 17th May, there are no additional Prelims for this.  The PM has come back stating that there is agreement on the value of the work, but that the 2 days on the programme is not acceptable and the work can just be done in the Defects Period - is this a correct way of the PM administering the Contract
Phil – It is fair to say that any instructed work after Completion Date does not instantly move Completion Date to the end of that instructed works. If you imagine a Contractor is running 100 days late, if they are then instructed one days extra work towards the end of that 100 days it would not be fair to the Employer that the right to charge Delay Damages would have been lost. In your situation, your planned Completion is beyond the Completion Date. The test will always be for any instruction what affect it has on planned Completion, and the entitlement will be to move Completion by the same date.

To take it further, if you did finish two weeks late and were charged delay damages, there is nothing to stop the Employer instructing maybe the correction of a discovered defect that is not the Contractors liability. The Contractor will be paid for the works when they do them, but will still have been charged Delay Damages for the original delay when it happened.
Glenn - not what I wanted to hear, but it is good to get the understanding.  Thanks again.