We area subcontractor operating under an NEC 4 ECS Contract. Throughout the project there has been a lack of acceptances of compensation events and a lack of instructions for various reasons. When we encounter an item that is additional work, we notify cross referencing the contract that the work is additional and prepare the amounts as per SsoC buildup. Out of about 50 events, we have only had 4 that have been assessed correctly. Recently, the contractor has stated that they are not obliged to accept our quotes as a precursor to doing the work, they believe they can instruct for work to be done (albeit verbally) and that we must take the financial hit, incur the costs and then debate the payment later, presumably to stay ahead of programme.
Is the contractor right? can they withhold acceptances of our quoted additional works? is there a specific clause they may be pointing to which defends their stance of not accepting our quotes and just telling us to do it?
Assuming this is an unamended NEC4 ECS Contract, it appears from your question that the contract is being mismanaged by both parties, especially by your Client (Contractor) who appears to be not acting in accordance or spirit of the contract (CL10) !
Firstly, as you’ve said, when you encounter a Compensation Event (60.1), you should be raising a Notification of a Compensation Event, the Contractor then has two (2) weeks to respond to the event unless a longer period has been agreed with the Subcontractor (61.3).
If the Contractor fails to reply within the period agreed, a Subcontractor may notify the Contractor of their failure. If the Contractor then fails to notify the Subcontractor for a further three weeks after that, the notification it is treated as accepted by the Contractor that the event is a Compensation Event and quotations can be submitted (61.3).
For you to have a high quantity of notifications not responded to suggests you are not making use of this Clause.
On the Contractor’s ‘precursor’ they are broadly correct as a Subcontractor ‘obeys an instruction providing it is in accordance with the subcontract’…(27.3) BUT, the Contractor should be notifying the Subcontractor of the compensation event at the time of the communication.
Re, quotation, the process above is more of less repeated, the quotation is submitted, if the contractor fails to respond you notify the Contractor of such, they have a further three weeks and if there is no response the quotation is treated as accepted (62.6)
My apologies for this somewhat late response. It is mostly unamended save a few Z clauses mostly relating to health and safety. There is no doubt this contract is being improperly administered on both sides. We are aware of the notification procedure and the notification reminders, we did go down this route initially but we were getting nothing back and it appeared that this part was largely ignored as per numerous meetings on the issue.
Re your last point on quotations, often we find an event happens and we are in a position to cost it, so we notify with narrative and grounds and cost using the SsoC to influence their decision making. In effect, our quote and compensation event notification is sent at the same time, but again, never responded to until we apply for payment and it then gets short certified with no grounds or reasoning as to why.
All i can suggest is revisiting those outstanding CE’s, identify the where they sit in the process (Assessment / Quotation / Implementation) i.e. are they past the response period as per 61.3 / 62.6, can you raise the relevant notifications… By doing this you may perhaps be able to prompt the Contractor to respond to those CE’s. This may not necessarily provide the answer / assessment you wish, but at least moves you out of this limbo you describe.