NEC3 ECC Option C contract. Contractor has installed a temporary works shoring system which has not worked due to poor ground conditions. This is not unforeseen physical conditions (60.2) so not a CE. Works paused and design and installation of shoring system needed to be reworked.
(Q) Should the initial attempt be a Disallowed Cost (11.2(25)) as it did not Provide the Works (11.2(13)) or should it be a Defined Cost and impact on the pain/gain share mechanism?
TIA
Hi Steven.
Firstly, things that are not used to Provide the Works are not disallowed per definitions in 11.2(25). This is because they are not Defined Cost in the first place. The preamble to the Schedule of Cost Components is clear; you only include costs incurred in order to Provide the Works.
As such it can’t be disallowed, but there remains the question of whether you should pay it as Defined Cost.
Based on the information here, this was incurred to Provide the Works (albeit it didn’t work as expected) and should be paid as Defined Cost. As you say, this will likely impact on pain / gain.
Contractors can make mistakes and defects are part of construction, so you would not generally disallow an error.
However, under 11.2(25)
you should disallow any cost that was incurred only because the Contractor did not follow an acceptance or procurement procedure stated in the Works Information.
If the works information requires the Contractor to procure temporary works in accordance with CDM regulations and best industry practice, he is likely to be required to comply with BS5975.
If he was working to BS5975 correctly, he would have done a temporary works risk assessment, categorized the level of temporary works, obtained a design and then installed to the design, thus ensuring that the shoring system proposed could actually be used.
If he failed to follow BS5975 and didn’t have a proper design, then you should likely disallow the cost because he didn’t comply with works information.