Why are Project Manager assessments considered the last point of call when carrying out an assessment?
I have heard more experienced Qs’s state that a PMA should only be done as a last resort but unsure why this is. Can anyone shed light on this? Is this strictly to keep working relationships good or is there another consequence I’m not fully grasping?
The Contractor is far more likely to be fully aware of all the consequences of a compensation event and therefore normally has first bite at assessing the compensation event. However, the consequences have to be justifiable and the additional time - delay to the Completion Date - and cost - change to the Prices - assessed by the Contractor in accordance with the contract.
If this is not the case - or more precisely, if the Project Manager decides this is the case - the he or she can either instruct another quotation from the Contractor (having given reasons for non-acceptance in sufficient detail for the Contractor to put it right) or can assess the compensation event themselves. If doing it themselves they will have had the consequences pointed out by the Contractor, but probably not agree wholly with them.
So I think it is ‘fair’ that the Contractor has the the first bite.
If the PM gets their assessment wrong, then the Contractor can go to adjudication on it.
Just to add to Jon’s already very good answer. I would consider these to be the rules, rather than a last resort. I would actually encourage a Project Manager to assess a CE themselves the first time the Contractor is late - so it will mean that the Contractor will be less likely to be late again. Project Manager should assess it fairly in accordance with the Contractor, but is still likely to be lower than the Contractor thinks it should be as risk they will look at less pessimistically - and the Contractor is unlikely to take this to adjudication unless it is vastly under.
So no it should not be a last resort, but as Jon says the Contractor should and is best placed to present their case as to what it should be (following the rules of the contract).
A further tip I would give the Project Manager is when they make their own assessment issue it as a draft for the Contractor to review and comment on, and then consider their comments before the Project Manager makes the final decision/implementation.