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NEC PSC: Delays due to prolongation

+1 vote
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Working under the PSC contract and a number of CE's have been issued which have resulted in delays to the contract. These CE's have served to push back the Completion Date and hence entitled the Consultant to compensation for their resources in this period.

The question is what resources should be included for this delay period and this is dependant on when the delay is assessed to have occurred.

If for example the delay has pushed the Completion Date back by say two weeks, should the Consultant
a) be pricing the delay based on their resource for the last two weeks of the contract?
or
b) be pricing the delay based on their resource when the delay event occurred, for example the resource that they had in weeks 8 and 9 of the contract?
asked Mar 5 in Compensation Events by Robert Trembath (230 points)  

1 Answer

+1 vote
First of all which may sound a but pedantic but the compensation event delay will be to planned Completion, which if the PM agrees will then move Completion Date by the same amount.  

In terms of the impact it depends on how this CE affects the Consultant. If it adds two weeks to the end of the contract which will just need a couple of extra people then the cost will be minimal. If the CE means the whole design team will be required for an additional two weeks then that is what would be assessed.

So it does not matter too much about when it occurs - but a genuine estimate of the impact it will incur.
answered Mar 5 by Glenn Hide (72,080 points)  
The issue is actually a bit more complex.

Because the assessment of this delay is significantly after the event the Employer is seeking to assess it on the basis of actual Time Charge for work already done. The Employer's stance is that the delay has had the effect of extending completion by say, two weeks therefore the Time Charge should be based on the resources deployed at this stage. The Consultant's stance is that the delays occurred and impacted the critical path in the middle of the project and that the resources deployed at this stage should be assessed.
The ideal solution would be to have a resource loaded programme and to compare the one before the CE with the one which includes the CE and the 2 week delay.  When the 'after' programme is agreed, this would then allow a cost calculation to be assessed comparing the 'before' and 'after' programmes.  The problem with a 2 week delay is that the time period of delay doesn't always occur on consecutive days and may even change the critical path.  As Glenn has also said it is the effect on planned Completion which determines the time and cost.