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NEC ECC: Is the Contractor entitled to a compensation event for an alternative? How might the time and cost impact be mitigated?

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Under option A, the Scope prepared by the Client specifies an escalator with a required performance, but the Contractor can buy an alternative (not meet the required performance) at a lower cost. The Contractor includes a reference to this alternative in the revised Activity Schedule, which was accepted by the Project Manager. The PM notices the arrival on Site of the alternative and instructs the Contractor to comply with the performance requirements of the escalator. The Contractor notifies a compensation event due to the upcoming additional cost and delay.

Is the Contractor entitled to a compensation event?

How might the Contractor reduce the impact?
asked Jul 25 in NEC3 and NEC4 Contracts by Mattom (120 points)  

1 Answer

0 votes
Activity Schedule is not Works information (or Scope under NEC4) so any quantities or descriptions in an activity schedule are not compensation events if they are wrong. The original Works Information/Scope will still stand. If they wanted to propose an alternative this should have been done by some other method - i.e. proposing a change and getting it agreed in writing that the change to Scope/Works Information has been accepted.

If I was the PM I would reject the notified compensation event. There could be a discussion about whether the PM would consider accepting the lesser quality escalator - but only in return for a quotation saving from the Contractor if they are prepared to give one.
answered Jul 25 by Glenn Hide Panel Member (77,970 points)