Clause 16.1 - Notice of Early Warning

We identified an unknown service when carrying out works on site which was not shown in any contract documents, we then raised an Early Warning as soon as we became aware of this.
We are now being told by the PM that we should have found this service earlier in the project when carrying out exploratory works for existing services.

The diversion of this service took approx. 6 months which has lead to a big delay on the project, which the PM is now saying we are not entitled to this EOT as we “should” have known about this earlier in the project which have not led to any delay ,although an Early Warning was raised as soon as we became aware.

Our argument is that 16.1 clearly states “As soon as either becomes aware”, have you ever had this issue before?

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Assuming you’re using NEC3 you are right, clause 16.1 says “as soon as either becomes aware”, which you say you did. The argument though is academic unless what you’re really arguing about is compensation event entitlement?

The only mention of early warning in the compensation event procedures is at clause 61.5 - “If the Project Manager decides that the Contractor did not give an early warning of the event which an experienced contractor could have given, he notifies this decision to the Contractor when he instructs him to submit quotations.”

The idea of this clause is to encourage contractors to notify early warnings and to ensure that they don’t benefit if they didn’t notify and should have. Whether or not you should have given an early warning is a question of fact and circumstance. In your case was it reasonable for you to have found the service earlier and why wasn’t it identified by your survey?

Whatever the PM’s opinion on the early warning is does not affect your entitlement in principle to a compensation event under clause 60.1(12), what it might do is reduce the amount you recover in terms of cost and time.