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NEC ECC: Is a quotation response binding?

+1 vote
164 views
Does the response to the Quotation Request have to be agreed prior to the issuing of an instruction to proceed with the additional works. For example, if the cost cannot be agreed but the instruction needs to be issued so as not to delay the works, does issuing an instruction mean that the cost in the response is binding or can the cost still be negotiated post-instruction?

Many thanks.
asked Jun 13, 2018 in General by avernon91 (140 points)  

1 Answer

+3 votes
This is why the contract has two ways of instructing a quotation. If a PM instructs a quotation under clause 61.1 then the Contractor is in the meantime proceeding with the works whilst the quotation is produced/reviewed. Indeed clause 63.1 makes it clear that even if the works are completed before the quote is agreed, it should still be based on forecast Defined Cost not actual Defined Cost.

The alternative is to instruct a quotation under clause 61.2 for a proposed instruction. This one the Contractor is not proceeding with the works and the PM gets the quotation before they decide whether to instruct the works. NEC4 now make sit much clearer how a proposed quotation works through to being implemented (which is now actually clause 65.1 rather than 61.2).

Clause 27.3 state that the Contractor obeys an instruction given by the PM in accordance with the contract.
answered Jun 13, 2018 by Glenn Hide (72,700 points)  
Very helpful, thank you Glenn.
Actually, can I clarify one more thing please?

Supposing that a response to a Quotation Request is received, the works contained in the QR have not yet begun and the cost is still under review.

Is the Contractor in a position to say that they will not begin the works in the QR until a cost has been agreed? If so, and if a delay to the works detailed in the QR would mean a delay to the entire project programme, does this not effectively hold the Client to ransom to either pay a high price for the additional works determined by the Contractor or to delay the entire project in order to agree a 'fair' price.
No they are not in a position to say they will not begin the works if the works have already been instructed and a quotation requested under 61.1.

It would hold the Client to ransom - which is why the contract does not allow it. If the Contractor holds off doing the work waiting for agreement, and then finish beyond the Completion Date then they would be liable for delay damages under X7
Just to amplify Glenn's comments, as he's already said in the initial answer, Clause 27.3 requires the Contractor to obey an instruction from the PM.

Also note that Clause 63.7 states that assessment of the CE is based on the assumption that the Contractor reacts competently and promptly to the CE, so if costs are incurred due to the Contractor waiting until the CE has been implemented (note that the contract does not require the cost to be 'agreed'), then the Employer does not have to pay such additional costs.