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NEC ECC: Capturing prelims with CEs in an option C contract

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Within an ECC Option C, an agreed level of full time resource was included within a Prelims element of the contract.  The Employer has instructed a significant amount of additional works through CEs but this work has been delivered using the initial level of prelims resource by delivering more efficiently with existing resources.  

Is it appropriate to include for the time and cost of the resource required to deliver this scope even though it is already fully covered in order to increase the target (but not amount payable through defined cost)?
asked Nov 14, 2018 in Compensation Events by LFS (140 points)  

1 Answer

+2 votes
Yes it is appropriate - and again an example of why it is essential for a Contractor to demonstrate both "planned Completion" and "Completion Date" on a programme. If the Contractor was performing well and they were already three weeks ahead on the critical path then planned Completion would be three weeks early.

If there was a compensation event that then required an additional 2.5 weeks of work on the critical path, planned Completion would move by 2.5 weeks but once implemented so would Completion Date move by 2.5 weeks (see NEC3 ECC 63.3, NEC4 ECC 63.5). They had created terminal float which is Contractor owned and they retain that in the assessment of compensation events. They are also entitled to claim "prelim" type costs for the 2.5 weeks as well, as otherwise they would have finished 2.5 weeks early and not incurred that prelim cost.

This is the same principle for option A or C in assessing the compensation event and the change to Prices.
answered Nov 14, 2018 by Glenn Hide (73,540 points)