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Time Assessment of sub-contractor additional work after the event
I am a consultant currently on a target cost contract, seconded to a main contractor who is having issues with one of his sub-contractors. In assessing the sub-contractors EWNs, he has asked me to disregard the confirmation of verbal instructions indicating how long the sub-contractor has taken to carry out additional works, even though many of these have been signed by the MC site managers. He is of the view that the variation should be assessed based on how long the SC SHOULD have taken as opposed to how long he ACTUALLY took to do the work.
I am hesitant to adopt this view as I consider it has no contractual basis and - frankly - it appears unfair to go back to a SC many months after the event and challenge how long he took to carry out some work.
Firstly, do signed site records have any contractual teeth when it comes to evidence of time? Or are they just evidential to prove some work was carried out?
And secondly, does the 'time' assessment above carry any contractual weight.
Feb 14, 2015
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Your client is actually correct - in as much as a compensation event should be a forecast of what the event should have been at the point you became aware it was a compensation event/a quotation was requested. Just because the Subcontractor can prove how long they took does not mean that they did not drag it out or take longer than they needed to as they were on what they thought was on a time charge. However - if this was the implied method by both Parties this could be very harsh on the Subcontractor as they may have taken longer due to other CE's that they had not bothered claiming for as they thought they were already getting recovery.
Furthermore, there is no such thing as a "confirmation of a verbal instruction" under the contract. The Subcontractor simply should not be doing the work until they have an instruction. The Subcontractor should not be put under pressure to act under a verbal instruction, as according to clause 13.1 it does not exist until it has been put in writing.
It is very difficult to avoid hindsight, so the practical view here is to look at how long it did take, compared to how long it should have taken, and if there is any differential look at why it exists and take that into account for the assessment.
The advice for the future is that all Parties follow the contract, i.e.
1) instruction given by PM under ECC or Contractor under ECS need to be in writing by them selves, not confirmed back by the other Party
2) compensation events should be a forecast of how long/how much it should be including risk that has a significant chance of occurring
3) where elements of the works are difficult to foresee - use Project Manager assumptions (clause 61.6) to state parameters on which the quote should be based
4) for the rare occasions where both Parties think it is too difficult to price agree exactly how this will be done so everyone knows clearly the rules (but this should not generally be necessary as the contract only allows for points 1-3 above)
Feb 14, 2015
Glenn's points are all valid, except - sorry Glenn - his response is ignoring one very important word : these are SIGNED Confirmation of Verbal Instructions. I.e. they have come back from the MC and therefore, in my opinion, can be taken as written instructions in accordance with the contract regardless of who wrote them out orginally.
As a subsidiary point, (which may not necessarily apply (so much) if it was the PM under the main contract and a consultant) the people mentioned are direct employees of the MC and could therefore be considered as agents of the Employer. It could be argued that the Parties - the MC in giving verbal instructions and the Subcontractor in acting on them with the Contractor's knowledge etc. - have modified the agreement by their consistent actions. This is far harder to 'prove' legally as you get into all sorts of questions about are they agents, how many times & how long has it happened / been going on etc, so I will re-terate my initial point of which I am pretty darn sure :
A SIGNED CVI effectively becomes a written instruction by the employing party !
Feb 17, 2015
I understand and like Jon's sentiment about signed "Confirmation of Verbal Instructions" and all the time both Parties are happy with this then there is not a problem, but the same could be said about following the contract as a whole. I add a big word of caution to this approach of using CVI's (which is why the contract itself does not mention them). First of all the contract does not mention "confirmation of verbal instructions" so its use could be very subjective. What if it contained something that was wrong? Within the contract any acceptance does not take away the Contractor's responsibility, but would this be something that requires an "acceptance" anyway?
More importantly here - your reference was "disregard the confirmation of verbal instructions indicating how long the sub-contractor has taken to carry out additional works". This does not strike me as a verbal instruction anyway. It is asking for them to confirm how long something took and how many men (but it has nothinbg to confirm how effective they were or how slowly/quickly they worked).
If they have instructed specifically they want you to do something (verbally) and you have confirmed it exactly back and they sign it then we are kind of where Jon pointed us towards - but why an earth will the PM not just confirm it himself in writing and we do not need to worry about a CVI (which is what the contract expects).
Feb 21, 2015
I absolutely agree with Glenn here. My experience on Site under the ICE form was that CVI's created all sorts of gamesmanship from both sides. Administrate the NEC3 correctly and you avoid them.
Feb 23, 2015
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