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NEC3 Option B - The affect of Z-Clauses and Contractors Proposals on Compensation Events

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Clause 60.1(12), 60.2, 60.3, 60.4 and 60.5 have been removed from an Option B Contract via a Z-Clause. The Works Information requires on site testing of formation following excavation and a construction detail to be modified if test results are below a certain threshold. The Works Information suggests a particular solution but also offers the Contractor the opportunity to propose an alternative in order to deal with the ground conditions. The Bill of Quantities does not include any separate items for change to the construction detail on this basis as the employer has deemed ground conditions to be a physical condition and therefore a Contractors risk item.

On site testing of the formation produces a failed result and the Contractor proposes a revised construction detail. This is accepted by the Project Manager. The Contractor raises a Compensation Event for these works under Clause 61.1 (1) Change to the Works Information.

Is this a Compensation Event?

If yes, why is this a Compensation Event if 60.1(12) has been removed? Are ground conditions not a physical condition?

If no, what is the Contractor entitled to be paid and via what mechanism?

There is no item in the Bill of Quantities for the works as it has been introduced via a Contractors Proposal outside of the Works Information. Does the Contract assume that there is a mistake in the Bill of Quantities and bring Clause 60.6 into effect?

If Clause 60.6 does come into effect, why is the Contractor entitled to a Compensation Event via this route when physical conditions, which led to the discrepancy in the Bill of Quantities, are a Contractors risk item as Clause 60.1(12) is removed?
asked Aug 20, 2016 in NEC3 Compensation Events by DJ90 (150 points)  

1 Answer

0 votes
I assume that the contract is Client design and therefore whilst clause 60.1(12) has been deleted a change in the Works Information under 60.1(1) is still a compensation event subject to the two bullet points of that clause.

Therefore if the design/Works Information has been changed, because the design was not adequate for the formation, the matter is a compensation event.

Deletion of clauses 60.2 60.3 60.4 60.5 does not affect the mechanics of 60.1(1).

Clause 60.6 provides for correction of a error in the BoQ. There is no error in the BoQ
answered Aug 30, 2016 by dave bates (5,450 points)