NEC 3 Option A Compensation Events

The PM notifies a CE and knowing that the lead in time for the materials element will delay completion.
Can the instruction to submit a quotation state the assumption that the work can or will be carried out post completion in order to avoid time related costs?

Unless you have amendments to the standard contract, the assessment of a compensation event looks at two factors, the effect of the compensation event on the Prices (Defined Cost + fee) and the effect on the Completion Date (and Key Dates). See clause 62.2.

Completion is defined by clause 11.2(2) and, in simple terms, is either when the works stated in the Works Information has been done or if not stated when the Employer is able to use the work for its intended purpose.

Whether or not the instructed work is required for Completion will therefore be determined by what is required for Completion. It may be just terminology but a PM’s assumption does not appear appropriate. The PM could revise the Works Information to exclude the instructed work from being required for Completion (if it otherwise would be) if that was practical. However, if the instructed work delays completing the works, extends your time on site, then the effect on the Prices will be very similar if not identical. In short the assumption will not avoid time related costs if they are a consequence of the CE.


Your first paragraph is fully understood.

The works required to achieve completion are not stated in the Works Information.

The Employer will be able to use the work for its intended purpose without these instructed works being completed and they are therefore not required for Completion.

Under these circumstances how does the instruction to provide a quotation make this clear so as to avoid costs associated with extending the time on site?

If the Works Information does not specify what works are required to achieve Completion, Completion is when all the works specified in the Works Information have been completed.
Naturally this would include the works that you intend to notify as a PMI/CE, and whilst you could note on the PMI/CE that the works instructed under said PMI do not form part of Completion requirements / that the works can be completed post Completion, this may not have the effect that you intend, given that your concern seems to relate more to time related preliminary costs than any effect on programme/Completion.
Whether the PMI/CE works are planned/completed pre or post Completion, the Contractor would still be entitled to recover the additional Defined Costs incurred through the CE, including any associated preliminary costs. The extent of prelims and preliminary costs would be largely dependant on the scope of the works instructed and could be equal to, less or more than the time related preliminary costs pre Completion e.g. if the Contractor had a 3 man supervision team and 3 cabins pre Completion and still needed the same team and cabins to complete the CE works you would expect the time related prelims would be similar whether the works are completed pre or post Completion, but if the team reduced to 1 man you would expect reduced time related preliminary costs.

The additional work is minimal in scope and could be completed in less than 1 day but the lead in time for the materials could be a significant number of weeks after the current planned completion date. There would be no need for supervision personnel or cabins etc during this period.
So yes, I am trying to minimise time related preliminary costs.
I suppose an option would be to notify the CE post completion and de-mobilisation.