NEC option A, contract is in 6 months delay due to an uncontested defect correction. Contractor has raised an Early Warning stating that thier supply chain has notified them that a material selected on the Works Information is no longer available.
Question, while the PM needs to instruct the change, would this constitute a Compensation Event? Would it not be reasonable to state that had the contractor not created the delay in the first place, the materials may still have been available, and therefore why should the Employer be being penalised.
Firstly you need to resolve the technical issue about the materials. Clause 18 deals with illegal and impossible requirements. The Contractor should notify the PM that the Works Information requires them to do something impossible i.e. include Plant and Materials in the works that are no longer available. Presuming that the PM agrees with the Contractor then they should issue an instruction under clause 18.1 to change the Works Information i.e. to change it to a require products that are available. The PM should discuss this with the Contractor before the instruction is issued to make sure the replacement product can be obtained and that the lead times are acceptable. It could be argued that the instruction was only necessary due to “a fault of the Contractor” i.e. if the Defect had been corrected sooner the material would have been available however the PM would need to be certain that this was in fact the case. Whilst technically the PM should notify the instruction as a compensation event it seems futile to do so if it can be argued that this was the Contractors fault and as such there will be no changes to prices or dates.
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