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NEC ECC: Implementing the impact programme before the costs of CE

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NEC3 ECC Option A - The PM has issued a PMI under clause 61.4 to submit a quotation and impact programme for the change. We subsequently provided both back to the PM for acceptance. Since this change has a large impact to the programme and costs, all Parties realised that it would take some time to agree this especially the cost element side. As such, the impact programme was then provided separately for approval to the PM to enable the works to progress whilst the costs were agreed. The PM has responded stating that the programme is agreed with the costs to be agreed through the CEQ process.

Does this pose any risk to us in terms of recovering the costs? Should we revert back to the original programme whilst the costs are agreed?
asked Jun 29 in Compensation Events by Buelcros (210 points)  

1 Answer

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It is not actually 61.4 that the PMI is issued under. This is more the response to a notified CE.

Under clause 61.1, if the PM gives an instruction that is a change to the Works Information, then at the same time they should also state that it is a compensation event and request the quotation. The last line also states that the Contractor puts the decision into affect - i.e proceeds even though time and cost will not have been agreed at that point. The Contractor is not really proceeding at risk, just at risk of the PM not agreeing with the quote and making their own assessment. If the Contractor does not agree then they have the option to go through adjudication to get what they rightfully believe is their full entitlement.

If however the quotation was instructed under clause 61.2, then this is a "what if" scenario and the Contractor does NOT proceed in the meantime until the quote received and considered, and then agreed and/or the PM instructs the Contractor to proceed with this item.

So the answer is you should get on with what ever has been instructed (and you have no choice) and the CE process will be the means of recovery in terms of increase to Prices and/or Completion Date. Any disagreement with the time and cost affect from an implemented CE then the next step is adjudication.
answered Jun 29 by Glenn Hide Panel Member (87,260 points)