NEC 3 ECSC - Equipment included in rates

NEC3 and NEC4 Contracts
1

Hi there,

We (Contractor) are currently carrying out a contract under the NEC 3 Short Contract and the Client has not included any preliminaries as part of the Price List.

The Client has included a statement within the Invitation to Tender reading:

“The pricing of the Tenderer’s overheads, establishment costs, charges, profit or preliminary items and all such costs associated with these items will be deemed to be included as part of the Tender Submission whether these are separately identified in the response or any pricing submission or otherwise.”

The above statement is out of the ordinary in relation to similar contracts that we carry out with this client and other similar clients. It is standard where items are listed to detail and specify the preliminaries required to carry out the works contained within the WI.

We have raised this query with the Client as an EW and are looking to agree on Welfare requirements (both for Client and Contractor personnel) and Traffic Management requirements and how these will be paid for within the the contract. In addition to the statement within the ITT the Client is advising that Welfare facilities falls under Equipment. I appreciate this may come under Cabins as part of the definition but there was no inclusion in the WI that Welfare facilities would be required for a Client Representative which we are currently supplying. Moreover, it is standard practice in most of the contracts that we carry out under the NEC 3 Short that we have preliminary items for this and these items are used to reimburse us.

The client has not amended the method of measurement to account for a change to the item coverage for its statement within the ITT but feels their statement within the ITT relieves them of having to pay for such items.

Any advice on the matter would be much appreciated.

2

Hi Paul. Since the WI does not mention welfare facilities for the Employer, then in my view they should not be provided unless instructed under 60.1(1), in which case you (the Contractor) would have to notify it as a CE under 61.1.

Regarding the Employer’s statement in the ITT, I would first say that it would have effect only if incorporated into the Contract, e.g. by relevant reference in the WI.

Provided that the above box is ticked, following the ordinary meaning of the works, the Employer’s statement seems to include the Contractor’s welfare (as part of “establishment” or “preliminary items”) but I cannot see any inference that can be drawn with regards to welfare for the Employer (or Client as referred to). I therefore believe that this should be instructed and notified as a CE.

P.S. Not sure I understand your Client’s reference to Equipment - if we are talking about clause 11.2(6), there is no need for the Employer’s personnel to have a site cabin in order for the Contractor to Provide the Works - unless this is a WI requirement which, as you said, is not.

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3

Hi Peter,

Thanks for the response, its much appreciated.

Unfortunately the situation has still not been resolved with the Client and we are now having to change the welfare unit onsite to remove the office facilities for the Employers personnel. Naively with the welfare we acted on verbal instructions (and good faith) received at the the prestart meeting as the site establishment turnaround was rushed. We never received meeting minutes or the formal instruction and the PM is now denying the verbal instruction happened to reduce/cut costs. Regrettably the difference of opinions between myself and the Client PM on the matter has resulted in the PM adopting an attitude out with the principle of 10.1.

As noted in my original query we are currently working offline with work on the road network a few months away and I am being proactive in trying to resolve the issue around no Traffic Management items being contained within the BoQ.

The Client is taking the same stance with Equipment in relation to not including Traffic Management items in the BoQ. The Clients opinion is
“It is our view that Absent any items in the Price List for specific equipment, the costs attributed to any equipment is deemed to be included in the Prices/ Rates which have been tendered.”

Traffic Management is noted in the WI document as follows:
"The Contractor provides all necessary traffic management as shown below in Minor Civil Engineering Works – General Requirements.

Minor Civil Engineering Works - General Requirements

The Contractor is responsible for managing the activities involved in the execution of works. This will involve co-ordination with other bodies such as statutory undertakers and Roads Authorities.

*Adequate working space, warning signs, means of access and lighting must be provided by the Contractor. Precautions shall be taken against the possible presence of gas in the controller cabinet, at the tops of signal poles, cable draw pits and ducts. If any gas is suspected anywhere in the ducting system, then the local gas board shall be contacted immediately. *

*The Contractor shall have responsibility for liaison with statutory undertakers and the Roads Authority to ascertain the positions of all underground services that may be affected by the proposed installation of traffic signal equipment. *

*The Contractor shall ensure that all necessary measures are taken as required by any Statutory Undertaker and/or the Employer for the protection of its mains, pipes, cables or other apparatus during the progress of the works. The Contractor shall construct and provide as required any auxiliary works necessary for the prevention of damage and interruption to Statutory Undertakers and/or Employer services to their satisfaction. *

The Construction (Design and Management) Regulations 2015 (CDM) place duties on clients, planning supervisors, designers and contractors to plan, coordinate and manage Health and Safety throughout all stages of a construction project. In particular, the client has to ensure that any designer or contractor appointed is fully competent to execute the works and will allocate sufficient resources for Health and Safety. Each of the foregoing designated persons have specific duties under the Regulations. The Contractor shall be considered to be the Principal Contractor in terms of CDM."

There is multiple site locations and junctions contained within the Works and not enough or any information within the contract documents to adequately assess or price the works associated with this hence why we have from the early stages submitted an EW raising our concerns.

The Client is simply saying anything they have missed from the Price List is to be included in our other tendered rates which we think is unfair and not correct. We are trying to resolve this with them before it escalates and /or is referred to adjudication.

Any advice on the Traffic Management concerns would be much appreciated.

Thanks

Paul

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4

Hi Paul,

From a first glance, it does not look good due to clause 11.2 (11) which states that, basically, you are responsible for any incidental works, services related to the works (which are described in the WI).

There could be a potential way out through the Price List, by way of change in any of the quantities that would justify a CE - one would have to look in the Price List wording.

All the above are based on the information you have shared; a close look at the contract could identify further issues that might help your case.

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