We have an NEC3 project Option A. There has been change in personnel.
Current personnel have identified that a CE has been issued for Contractor Design element which is clearly required and noted in the Works Information as required.
The Contractor wants paid for the Works Information and has been paid the CE.
Can a CE be issued now to deduct the works in the Works Information as the CE issued deals with this - otherwise the Contractor is claiming the Works Information work payment and the CE (Works Information works were identified in part in the Activity Schedule).
Thank you
Once a compensation event is implemented it is full and final and can not be amended. The only exception to this is if the event had been based upon Project Manager assumptions, but even then these would be a new compensation event under 60.1(17) and only the change to assumptions can be considered (i,e. you do not get to open up the whole of the original quotation and re-assess).
Project Manager can change their mind about a decision which is a compensation event under 60.1(8). However, clause 63.2 states that if a compensation event is to reduce the total Defined Cost, the Prices are NOT reduced except as stated in the contract. The only two elements that allow the Prices to be reduced are a change to the Works Information or corrections to PM assumptions. So at this stage if this “mistake” is spotted after the CE has been implemented by the original PM then there is no facility to reduce the Prices.
It really should not have got this far, as the original PM should not have accepted it is a compensation event, and then not agreed the quotation as to how much this increased the contractor’s Prices by.
Having said all of that, if it is VERY clear that the Contractor was mistaken in claiming this and the Client knows it, it would not be great for the Contractor’s relationship with that Client f they are looking for repeat work. They might “by agreement” pay back the additional money paid. Contractually they do not need to but there may well be a bigger picture to consider. Equally however, if a Contractor does not notify an event within 8 weeks then they are time-barred for claiming - so there are remedies against them if they do something wrong in accordance with the contract too that the Client will not then just say “ok we will pay you”.
The contractual rules are there to be understood and followed by both Parties, and failure to follow them will mean that it could cost either Party something that it should’t have.