NEC 4 ECC: Option C Clause 60.1(19) for Covid - additional costs, time only?

NEC3 and NEC4 Contracts Compensation Events
1

Within our civils project, we have managed to continue the works with little/no delay due to Covid 19. The commercial staff are working from home and the operational staff are sticking by the government guidelines. However, to continue as per the programme certain activities have cost more, for example, additional vehicles for the workforce have been required to travel the site, same for the subcontractors. Additional cleaning has been implemented to ensure the safety of the site staff. Many additional costs elements have been introduced to follow the Cabinet guidelines but have not had delay.

Under Clause 60.1.19 the compensation event only applies if we have been stopped from completing the whole of the works or complete the whole of the works by the date for planned completion. This is not the case and the client believes even if we are delayed for 1 day, it is that 1 day we should recover.

The managing QS is also investigating the potential change in law however, much of what has been issued is guidance not actual legislation to follow, therefore could be argued does not apply.

Is this something the contractor & then subsequent subcontractors have to swallow or is there another route to recovery.

2

see my article here for a full consideration of these topics - https://www.linkedin.com/pulse/who-pays-covid-19-contract-risk-allocation-under-nec-contracts-jon/ - if you have any further questions, then don’t hesitate to ask.

In answer to your further question having read the article, the answer would be ‘Yes’ once a threshold is crossed i.e. it is a compensation event. Before that point is reached, just because you are incurring extra cost, the answer a ‘No’.

3

Hi Jon,

I have had a read through but I am not sure I have found my answer. The main point is the fact the 60.1.19 is argued as a time Compensation event. Is there a way to recover cost for increasing resources to continue to meet programme, i.e driving a van each to complete the work so they can social distance. Would you be able to recover these costs or would you assess the CE as if you hadn’t implemented the additional resource, you would have been delayed beyond completion and that is what can be claimed for?

4

i.e Incidental costs incurred due to the coronavirus pandemic