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NEC ECS: Compensation Events - Can one cancel out the other ?

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Our Subcontractor has raised  CE1 for 2 weeks delay regarding a specific activity lets say called 'Activity A'. Activity A is on the critical path. This CE has been notified and we the Contractor are within our period of reply to either accept / decline.

 At this point we agree that this is a CE to the Subcontractor, however...

We have recieved a PMI from our client to de-scope 'Activity A' which we have communicated to our Subcontractor through a compensation event 60.1. All within the same Accepted Programme and period of reply for CE01.


I the Contractor know that 'Activity A' is de-scoped as does the Subcontractor, we both know it has no effect to the Defined Cost to date but the forecast (back of programme) has a cost impact / Completion Date.

Do i:

1. Reject the CE as this does not effect the defined cost / completion date
2. Accept the CE and recieve a quotation which presumably would be £0

Or any other souliton ?

This is an NEC ECS Option A.
asked Sep 12 in NEC3 Compensation Events by QS007 (440 points)  

1 Answer

+1 vote
Contractually you should assess the first CE and its impact on planned Completion and any Defined Cost, and then instruct the second CE to omit the works and see its revised subsequent impact on both Defined Cost and planned Completion. You will get the full savings in the Price, the only thing that cant happen is Completion Date coming back IF it did move with the first CE.

In practice if you both agree these cancel each other out you may just agree not to pursue either of them and just reflect the actual scope on the revised programme if no impact, but otherwise you should follow the above.
answered 6 days ago by Glenn Hide (62,440 points)  
Thank you Glenn, really appreciated.

Just to confirm, the accepted programme shows the Planned Completion date as 2 weeks after the Completion Date. If we accepted CE1 (2week) that will push the Completion Date out by 2 weeks.

We've issue CE2 for the de-scope would I be right in saying the Contractor can expect that 2 weeks back, returning the completion date back to the original date.

Essentially we are trying to avoid the delay to the original Completion Date.
Actually I am afraid no you would not be correct. No negative CE can ever bring forward the Completion Date - only acceleration under clause 36 can do that.

The full value of the savings including any prelim type costs and also fee should be included in the quotation for omitted works, but the Completion Date stays as was increasing terminal float (which the Contractor owns). All this really does is protect the Contractor from delay damages beyond the revised date rather than the earlier date.