Clause 63.6 - Equipment breakdown lost time

NEC3 and NEC4 Contracts Compensation Events
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Under clause 63.6 of NEC3 ECC, the Contractor includes allowances for its risks in its assessment of a CE (abridged). The Contractor would logically include non-productive time for its own Equipment in the case of breakdown and associated lost time for Subcontractors etc. This would change the total of the Prices.

Under Option C for example, the cost associated with this lost time would not be incurred to Provide the Works, therefore would not fall under Defined Cost and would not be paid. This would logically mean the Contractor would be including for cost it would not be reimbursed, with the effect being that its chance for gainshare would be higher as the ToTP would be inflated?

I don’t see this can be the correct interpretation or effect of the contract but I can’t see any other way of looking at it. Does anyone have any thoughts concerning this?

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@MarkR I’m not quite sure that the lost time is not incurred to Provide the Works. There could be, for example, a breakdown that happens in the course of doing work necessary to complete the works (see cl. 11.2(13)). Further, I cannot see breakdowns, lost time etc. in Disallowed Cost under cl. 11.2(25).

I would therefore not consider this cost disallowed.

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Thanks @Peter_Papadakis, that’s an interesting approach, I purposely didn’t state Disallowed Cost for the reason you give, but could, say, a broken down excavator really be considered as doing work necessary to complete the works at the point it breaks down until the time it’s brought back into use, and if so is the associated cost Defined Cost at all? SoCC Item 26 1st bp is the only item that refers to maintenance and repair, more specifically associated transport charges, and these are not chargeable under Defined Cost.

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Yes, that is true, transport charges to and from the Working Areas for repair and maintenance are excluded unless included in the hire or rental rates.

However, I don’t see anything odd in allowing such costs, since it is a shared risk contract. By way of example, Defects’ correction after Completion is also Defined Cost.

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