On an NEC3 ECC option C contract (main option W2 included) if the PM has followed the various provisions of the contract regarding PM instruction/quotations etc and has ultimately notified that they’ll make their own assessment, and has subsequently done so (in line with cl. 64.3), the next step for the Contractor, if they disagree with the PM’s assessment, is to trigger adjudication. However, given that there’s no timescale on when this could occur, there’s an ongoing risk to cost certainty that the Employer may not be prepared to tolerate i.e. that they don’t have certainty that CE’s are agreed or the matters closed out via adjudication.
Despite the PM assessment having been notified, would there be any issue with the Employer triggering adjudication in order to bring the issue of potential disagreement wrt PM assessments to a head (the idea being that the determination of adjudication is dealt with sooner rather than later)?
As I understand it, to trigger the ‘dispute’ resolution procedures, there has to be sufficient evidence that a dispute has crystallised. This usually often a series of exchanges between the Parties culminating in the aggrieved party writing to the other to confirm that this is their final position and if they don’t respond by a certain time, say 2 weeks, then the aggrieved Party will assume that the dispute has crystallised.
From your words, I am not sure if the Contractor is contesting the PM’s assessments, so am nit sure if a dispute has crystallised.
Is there actually a dispute (‘any difference’) if the Contractor has not formally disputed the matter? Consequently, what would the Adjudicator actually decide upon?
Once a CE has been implemented (quotation is notified as accepted or notification of PM’s assessment), the procedure has formally concluded under the contract. The main issue to consider is the principle of why the PM has made an assessment and whether the assessment reasonably allows for matters required to be included in a quotation (risk allowances, disruption, effect on other operations etc).
I appreciate that the right to refer a matter to adjudication ‘at any time’ may leave matters ‘open ended’. Instead of adjudication, the Employer could consider a ‘compliance assessment’ whereby the PM’s actions are reviewed by an independent third party to provide assurance, or otherwise, of the actions taken, notwithstanding any confidentiality issues.
Often, especially on a longer term, higher value project, a supplemental agreement or deed of variation is implemented to ‘mop up’ and conclude any outstanding issues to provide greater financial certainty going forward. This will obviously require some consideration, so the use will depend upon what the ‘difference’ actually is and the likelihood of matters being disputed.