We are working on an NEC 4 Option A project planned to be working both day and night shifts (using the same equipment night and day).
An instruction has just been issued, stopping night working, that will now affect the working regime for the project.
2 issues have arisen in respect of the evaluation of the CE
On the first 2 nights, resources were stood down whilst the final decision was made. Assessment of people costs, no problem, payable. However, in respect of equipment, it is the same hired equipment being used day and night. Should the equipment be paid for when it was stood during the 2 nights (CECA less 40% as per CD2) or is it deemed there is no addition to Defined Cost as the plant has already been paid for during its day-time use? Effect: No ‘true cost’ increase to the Contractor for hiring equipment.
The night works will now have to be undertaken during the day, some concurrently with existing activities (using additional hired equipment), some during an extended period. When assessing the cost implications of the change; people cost no problem (likely to be cheaper as paying day rates and not night rates). However, equipment again… on the basis that the hired plant was effectively already paid for during the day working and the additional cost for the nights was effectively just the fuel cost, should the defined cost of equipment for the night work be taken into account when calculating the ‘change in defined cost’, or should the equipment be excluded from the calculation as it is effectively ‘free’ (fuel aside). Effect: Large increase in ‘true cost’ to the Contactor for hiring equipment.