We are operating a NEC 4 Term Service contract for roads maintenance.
The Contractor has submitted an early warning regarding the exceptional increases in fuel prices due to the UAS/Iran war. We sympathetic to the Contractor’s position, however we cannot see that there is a compensation event that would be applicable.
Is there any contractual mechanism whereby we can compensate the Contractor?
We operate a 6 monthly CPF clause to adjust the Price List which is implemented on 01 April and 01 October of each contract year. Unfortunately for the Contractor the latest adjustment that has been implemented does not take account of the current increases. The Contractor has suggested that the CPF clause should be changed to monthly adjustments rather than bi-annual to take account of the volatility of fuel prices, which is a sensible proposal, but again we cannot see the contractual mechanism to enable this.
Are you aware if National Highways has a position on this problem.
I would be grateful for your comments
Thank you.