NEC ECC: Can Project Manager change their mind that something is a CE?

On NEC3 ECC option C, Employer has submitted PMI and issued CE. After now seeing the quotation, he has changed his mine after works has been completed.

Cost will be paid under contract but I want to project the target. I also disagree that it’s not a change.

First of all, what is the Employer doing giving a PMI? Only the Project Manager - the PM in in PMI - can do it. Given that, he never made “his mind” contractually, so he can’t change it.

But I will answer as if it was the PM giving the instruction. It comes down to this: was the PM instructing you to do something different than was in the original Works Information (WI) or was he repeating something already in the contract. If they were adding in something or providing more detail on something in the WI, then it is a compensation event under clause 60.1(1) providing the change does not relate to the two bullet points in 60.1(1).

Assuming ‘Yes’ to the above, then the next question is ‘what it the effect?’. Adding in something clearly costs more. Specifying something in more detail depends on whether what they are specifying is more expensive than what the Contractor could reasonably be expecting to provide given the existing Works Information. My normal example is the WI says provide taps and the PMI is for gold taps. The ‘gold’ bit will be extra cost and if done late after the Contractor has already ordered the taps, then there is likely to be a time effect as well.

You would like to think that if he has stated that this instruction is a compensation event then he would have done his homework and only agreed it was one if they believed it. Up until it is implemented (and there really is no going back at that point) if they then realise that actually these were in the original Works Information then there is nothing to stop them reversing that decision. Even though you would feel hard done by, if it really was in the Works Information this is not something that the Employer should be paying for. It would be harsh on them that if it clearly was not a CE that a quick decision early on that was incorrect means they now in effect have to pay twice for this item. It would also potentially encourage wrong behaviours as the Contractor could try to sneak all sorts of things through and once they have the initial “yes” they have then got the Employer and they have to pay.

The fact you were instructed to do the drainage works in itself is not a guarantee that you are entitled to additional money. Only if that instruction is a change to Works Information can it then be notified as a compensation event which is then the means to assess time and cost if they agree it is a compensation event.

The key here therefore is to beef up your argument/justification that this instructed drainage works IS a change to the Works Information and therefore a compensation event. If they are adamant now that it is not one, then this is an issue where if they will not change their minds you could take to adjudication to challenge. The threat of this may or may not bring them back to the table to avoid, or you may go through with the adjudication to get what you believe is your entitlement. You would obviously only do this if you are pretty certain it is a valid CE.