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NEC ECC: Change to Programme due to Employer's Risk not occurring

+1 vote
Under an Option A contract, there is an additional Employer's Risk of "3rd Party Approvals".  The accepted programme clearly shows the duration's allowed by the Contractor to receive these approvals.  These are on the critical path of the programme.
If the approvals are given quicker than allowed for in the programme and, as a result, the planned completion moves to an earlier date, would this be a CE under 60.1(14), moving the Completion Date enabling the Employer to recover a cost saving?
asked Mar 10 in Time by SJG21 (190 points)  
To clarify what Glenn says, 60.1 (14) is not applicable as, form what you say above, the additional compensation event of 3rd party approvals is written in as an option Z clause and not stated in an Project Manager's Instruction for a quotation as being an 'assumption' on which the assessment of a compensation event is based.

1 Answer

+1 vote
Best answer
If the approvals are given quicker then this does bring forward the planned Completion but NOT the Completion Date. Even if 60.1(14) was applicable as a CE, there may be a cost saving but in terms of time clause 63.3 only talks about Completion Date moving later not earlier. The only two ways that Completion date can ever be brought forward is acceleration under clause 36 and accepting a defect under clause 44 (the latter of which I have never seen used).

This therefore creates terminal float - which is then owned by the Contractor. The only real benefit to this is protection against delay damages if you have X7) to the original date not the earlier one.
answered Mar 10 by Glenn Hide (66,310 points)  
selected Mar 17 by Glenn Hide