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NEC ECC: What happens if takeover causes unnecessary interference to the works?

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In NEC3, are there any circumstances in which the Contractor can get paid back delay damages?e.g what happens if takeover causes unnecessary disruption to the works?
asked Jun 26 in General by Samatar (210 points)  

1 Answer

+1 vote
If the Employer takes over works prior to Completion, then this will be a compensation event under 60.1(15). Any additional cost the Contractor incurs would then be recoverable, and also there would be an entitlement to move Completion Date if planned Completion is affected, which would then mean they are not liable for delay damages.

The only way that a Contractor would ever get paid back delay damages is if subsequently that there was an agreement that Completion Date should have moved and that either less delay damages should have been paid or none at all. In this instance the Contractor would also be entitled to interest on the money they had already paid. The compensation event process is the only way that Completion Date can be moved later so it would have to be an un-agreed compensation event where this eventuality could occur.
answered Jun 26 by Glenn Hide Panel Member (87,260 points)  
In the case where compensation event wouldn't occur i.e. the Employer takes over on the Completion Date and then pays for delay damages - would the agreement to move Completion Date be contractually recorded so that it can be referred to for when the Contractor seeks to get delay damages paid back?
Samatar - I am not quite sure what you mean here. The very nature of delay damages is that they are only charged if the Contractor achieves Completion after the Completion Date. Either
1) the Employer takes over before Completion - which is a compensation event and time/cost evaluated within CE quote including moving Completion date so delay damages would not be liable, or
2) take over is on the Completion Date in which case Completion has been achieved and no delay damages would be liable, or
3) take over is after the Completion Date in which case the Contractor is already liable for delay damages.

Again - any "contractual recording of moving Completion Date" can only ever be through an implemented compensation event. Where ever the Completion Date ends up after all agreed compensation events, if the Contractor achieves Completion after that date they are liable for delay damages at the daily rate stated in CD1, or on or before Completion Date means they can not be charged delay damages.
Thanks Glenn,

Sorry, I meant the Employer takes over on the Completion Date though the Contractor does not complete the works (Completion not certified) - this would not be a compensation event as I understand, hence delay damages would be liable.

As I understand, the Contractor has no contractual grounds to recover those costs even if he feels that early take over has caused an interference to the works.

Thanks,
The Employer should only take over when the Contractor has achieved Completion. If the Contractor has not achieved Completion and the Employer does not take over then the Contractor is liable for delay damages.

If the Employer chooses to take-over anyway when the Contractor is not finished, this IS a compensation event and any increased cost and time that the Contractor will incur having to work around the Employer safely is recoverable as part of that CE. In terms of time, this would mean Completion date would move as a result by the amount demonstrated and the Contractor would not therefore be liable for delay damages.