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NEC ECS: Terminal Float pricing?

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As part of an NEC3 ECS Main Option A.

The contract has been awarded and executed by both parties 6 weeks before the starting date

Under 60.1 (1) The Subcontractor has been instructed to start works 4 weeks earlier than starting date stated in the Subcontract Data. The Subcontractor has agreed and commenced works on the requested earlier starting date.

As part of the time and cost quotation provided by the Subcontractor to the Contractor, 2 main concerns arise:

1) The Subcontractor has added the 4 weeks now gained due to an earlier start as their terminal float and also priced the 4 weeks worth of prelims to that effect.

2) Also, the terminal float that is originally in the tender (2 weeks) programme has also been priced to take into account prelims.

Should the Subcontractor be able to price the terminal float as part of their Tender and Compensation Events?
asked Apr 9 in General by John Hilop (120 points)  

1 Answer

+1 vote
Quite an unusual situation here.

Firstly I am not sure you have the power to INSTRUCT them to start earlier than the starting date (or even why you would want to), but by agreement obviously they can. If they are to start four weeks earlier and their whole programme can just shuffle forward by four weeks (which is not necessarily the case)  then planned Completion comes forward by four weeks but Completion Date will not move, hence yes creating four weeks terminal float which the Subcontractor then owns. However, they can't price that four week period as "prelims" - it will just give them an extra four week period where they could overrun without incurring delay damages. Any CE is meant to allow them additional cost they are incurring - and if planned Completion is coming forward by four weeks by starting four weeks earlier they are NOT incurring an extra four weeks prelims.

As for whether a Subcontractor can/should price the terminal float period at tender stage - it is within their gift to choose to or not. However, if they want to make sure they win the tender they would be ill advised to price for that period. In your example they had two weeks terminal float at tender stage. If they are saying that they can do the works in 28 weeks(say) and the Completion Date you have stated is at week 30, they only need price 28 weeks prelims within their bid. If ever you gave them a CE that moved planned Completion from week 28 to week 30, they would be entitled to claim two weeks worth of prelims. If they did price it at 30 weeks then they are just lucky they still won the bid.
answered Apr 9 by Glenn Hide (73,660 points)