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NEC ECC: Commencing a PMI before a quote for a CE has been accepted

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Works are progressing as part of a renovation project under a ECC Contract – Option B.

It transpires that the original design is not suitable because of elements uncovered during the course of the works.  The PM has issued an instruction to correct his design so the project can be completed including the wording "this is a compensation event, please give me a quotation under clause 61.1.

The amended works are critical to the programme and if they are not started the programme will slip, whereby the client will be unable to take possession of the building.
Unfortunately the Contractor is refusing to start the works until the PM has accepted their quotation.  The Contractor is also taking the allowed time to return a quotation.  This is effectively delaying the works.  Ordinarily, the timescales for returning a quotation do not cause a problem, however in this case it is delaying the whole scheme.

When does a Contractor have to start instructed works, can they delay until a quotation is accepted?
asked Jul 18, 2018 in Compensation Events by Declan Murphy (330 points)  

1 Answer

+2 votes
The Contractor is obliged to follow an instruction issued by the Project Manager given in accordance with the contract (clause 27.3). Assessments of the CE are based upon the Contractor acting competently and promptly. If they don't and then delay the planned Completion as a result then they will be liable for delay damages, as the PM will assess the CE as though they had and not agree to a movement of the Completion Date.

I do have some sympathy that the Contractor does not WANT to proceed without the quote being agreed first but the contract does not allow them to hold out. Indeed if that were the case then the Contractor would always have the Employer over a barrel and they would have to agree the quote first or they wouldn't do it.

So the answer is they can delay doing the works until after quote agreed but they would be ill advised to as the CE will be a forecast of entitlement as though they had acted promptly.
answered Jul 18, 2018 by Glenn Hide Panel Member (79,060 points)  
Thank you for the guidance Glenn.
So essentially because the Works Information has changed the Contractor, in this instance, would submit a revised programme showing the delay, which, in their view, has been caused because they were waiting for the quotation to be accepted.  The PM in turn would reject their revised programme because it does not comply with the Works Information as amended by their instruction and the Contractor would be subject to damages?
Not sure why you say the PM would reject the programme? The instruction changes the Works Information. The Contractor should reflect on the programme how they now plan to do the works, which in this case if this instruction delays the critical path will move planned Completion. The assessment of the CE will decide if Completion Date should move as well which will then ultimately determine if delay damages are applicable.

If the Contractor has unnecessarily delayed the planned Completion by not acting promptly to the instruction, still no reason to reject the programme as it will now reflect how they plan to do the works - but the CE assessment will determine that there is no entitlement to move Completion Date and they will be liable for the associated delay damages.