NEC3 ECC Main Option E. The project has been ongoing for a few months, no accepted programmes, compensation events being raised (through PMI’s and NCE’s). No programme referenced in the Contract Data (CD), although a programme was submitted with the tender, and the Employer used dates from this programme to fill in the contract Completion Date and Sectional Completion Dates in the CD.
Also, 1 of 3 sectional completion dates is not achievable as the tender programme (which isn’t referenced in the CD but created by the Contractor) has an error in activities being linked properly.
CL 31 programme should be the starting point, after which the compensation events can be assessed in the order they have occurred. But the the Contractor is unable to submit a realistic CL 31 that is also compliant with all contract dates. It is the Employer’s understanding that CL 31 needs to be compliant with the dates in the Contract Data and CL 32’s going forward will reflect the delays and realistic position, which means CL 31 will not be realistic, but contract compliant.
In the absence of an accepted programme and none of the impacts being submitted, the Contractor believes CL 31 (once accepted) will be used as the last accepted to assess all compensation events for the last 7 months. The Employer believes only CE’s that occur before each programme submission is captured, followed by a CL 32 with progress. In other words, if a programme is due every 12th of the month, at each interval the change is captured and programme progressed before it becomes the accepted at the time.
What a mess that frankly neither party should have allowed to happen. Both Parties should have seen the importance of the first Accepted Programme and do more to make it happen. Did the Project Manager withhold 25% of each valuation (clause 50.3) as they had not been able to accept the first programme? If not may be that would have got the desired result earlier. Crazy this has not happened within the first seven months, but you are not the first project to experience it and no doubt unfortunately you will not be the last either, although with education and training I can report in my experience this is happening less and less now.
The only practical solution here is to first get the original programme and hence baseline agreed as to where they were on day 1. Then you need to add in progressively the compensation events as they occurred, but each time updating the programme with progress and other compensation events that had occurred up until the point of the new CE you are assessing. This is a big job now, and will no doubt be subjective - which is why both Parties should have spent more effort avoiding this in the first place. This is similar I think to what your Employer is describing which if so yes I agree it is the only fair way to assess. If you were already in delay compared to the last Accepted Programme before any CE is assessed, that should be taken into account. Equally if you were ahead before the CE came along that should equally be taken into account.
Being option E, the whole process of agreeing compensation events is less significantly cost wise as they are paid actual cost anyway (less any Disallowed Costs) but the important element under option E is agreeing the time effects of compensation events to get the Completion Date moved if it is on the critical path, as the Contractor can still be liable for delay damages under X7 if they are late under option E.