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NEC3 PSC - Programme with rejected CE

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Scenario under NEC PSC:

Consultant has been delayed in delivering design package by three weeks. Root cause of delay is a simple failure to timeously transfer files between themselves and a sub consultant (duration of delay is excessive and more than likely representative of failure to notice and manage the issue rather than a fair estimate of time to resolve). Consultant has submitted a CE (time only) under Cl 60.1(11).  

Proposed approach:

Overall (project) programme has sufficient float to deal with delay to design (owing to seasonal construction window) and therefore pursuing the Consultant to recover delay is not strictly necessary.

However, CE should still be rejected as cause of delay was certainly foreseeable. Also important from a precedent perspective as consultant regularly (across a framework) tries to use 60.1(11) as a catch-all for any delays not attributable to the defined CEs.

Questions:

1.    Is there a better way to approach this such that (a) we comply with contract, (b) we acknowledge that delay is not a critical issue and (c) we ensure that we don't create precedent (in an operating rather than legal sense) for how future events which may be time critical are dealt with?
2.    What should the consultant submit on their programme i.e. if, as they claim, there is zero float (within the design programme) and no opportunity to accelerate other activities should they proceed to issue a programme with proposed Completion exceeding the agreed Completion Date?
asked May 29 in Time by martin_dunn (140 points)  

1 Answer

+1 vote
You have to decide if this is a compensation event. Clause 60.1(11) is typically for more force majeure type events - it does not sound like your example fits that description. Did they manage it properly?

IF this is a compensation event, then you consider the effects on the Accepted Programme that this brings. If this event moves planned Completion or planned Sectional Completion then there is an entitlement to move the Completion Date/Sectional Completion Date accordingly once the CE is implemented. If it is a CE but doesn't move planned Completion then there is no entitlement to time as it is using up total float which is shared under the contract.

If this is not agreed as a compensation event and they are delayed, then yes planned Completion will be moving beyond Completion Date and they would be potentially liable for delay damages under X7 if they can not recover this time back.  

Point of note there is no such thing as precedent under NEC contracts. Each time you make a decision it is in accordance with the rules of the contract. If a decision is made that was not in line with the contract, that does not reset the rules going forward. The next time it should be decided in accordance with the rules of the contract - not what was (wrongly) agreed last time.
answered Jun 18 by Glenn Hide Panel Member (77,970 points)