NEC ECC: Contract Issue vs Construction Issue Works Information

NEC3 and NEC4 Contracts Compensation Events
1

NEC Option B query:

At tender stage, the Works Information stated that Tender Works Information should not be used to construct the works. Therefore, the Contractor would assume that Works Information would be revised to allow construction of the works. As a consequence of this, the tender programme was submitted with a milestone (which has the same date as the Starting Date) that read “Receipt of all Works Information marked ‘For Construction”. From the Contractor’s perspective, this was a means of ensuring all Works Information marked for construction would be in the Contractor’s hands at the Starting Date of the Contract.

However, at the Starting Date and signing of the Contract no revised Works Information had been received. Several days later, the Tender Works Information were then re-issued and marked “Contract Issue”. A month later, parts of the Works Information were revised further and issued “For Construction”.

Post award, the first programme for acceptance was revised from tender but continued to include the milestone for “Receipt of Works Information marked for construction” and this was accepted by the PM, albeit after the issue of the Contract issue Works Information but before the issue of the Works Information marked “for Construction”.

Q1. Is the Contractor to assume that they are signed up to the Contract based on the Tender Works Information (given the absence of Contract issue Works Information at the time of signing and the Starting Date)?

Q2. Is the Contractor obligated to commence their works based on the issue of Contract Works Information or as phrased by the PM “This is the information that the Contractor has been contracted to build”? This is despite the milestone shown in the tender programme and on the acceptance of the first baseline “CL31” programme requesting WI to be issued “For Construction”.

Q3. Does the Contractor have a right under the Contract to stipulate that they require “Construction Issue” Works Information in order to commence the works, given that they stipulated this requirement in their programme from tender stage and on the accepted baseline programme?

Q4. Most importantly, does the Contractor require an instruction to commence works based on the Contract Issue Works Information, given that it was issued post-signing and post-Starting Date? This is in reference to Q1, which assumes that the Contractor is signed up to the Contract based on the tender Works Information. On the flip side, the PM states that because the Contractor knows and is not to build to the Tender WI, the PM has no need to instruct the Contract issue WI because this is the first issue of the Contracted documents and only subsequent changes need instructing.

Any advice, particularly based on what provision is made under the Contract, would be much appreciated.

1 Like
2

Firstly, the contract documents are the baseline for any contracted works. Any changes made subsequently will be subject to the procedures under the contract, including the compensation event procedure.

The fact you knew that there would be a ‘construction issue’ of Works Information, simply means that you were given advanced notice that the PM would make an instruction under clause 14.3. You have also, rightly, included the issue of such information in your programme, although hopefully stating that it is to be provided by the Employer.

The whole process should be based upon a ‘configuration control’ principle which constantly re-baselines the scope of works, taking account of what occured and when. This enables each change to be administered correctly under the appropriate contract procedure.

If the Accepted programme showed the Employer providing the ‘Construction Issue WI’ and the date has passed then this would be a CE under 60.1 (3) and you should notify a compensation event.

If the PM did not notify a CE when issuing the ‘Construction Issue WI’ then you should notify a further CE under clause 61.3.

3

Andrew

Thank you for your comment and I agree that any changes in the Contract-issue WI to Construction-issue WI is a CE and should be raised accordingly. However, I am keen to establish answers to my questions 1-4 on my original post which is concerned with:

  1. Establishing if the Contractor is signed up to tender WI (which we know the Contractor is not to build to)
  2. Whether the Contractor is obligated to commence works based on Contract-issue WI or if they have a right to await the issue of Construction-issue WI.
  3. Whether Cotract-issue WI is to be instructed given the PM’s view is that this is the first ‘set’ of WI to which the Contractor is contracted to build to (obviously subsequent changes to WI, including changing WI from Contract-issue to Construction-issue, will need instructed for sure).
4

My answers to your questions would be:

  1. Yes the Contractor is assumed to have priced/programmed for the Works Information given at tender stage (what ever choice do they have). The idea being “base it on something we know will change, and then we will assess that change as a compensation event(s)”

  2. I think the milestone in the programme is kind of irrelevant. Contractor has to provide the works in accordance with the Works Information (20.1). Therefore unless there was an instruction otherwise, they should have worked to the Works Information. If they knew this is not what the Employer probably intends, there should have been an early warning and a subsequent meeting to understand the potential issue is and what the PM wants to do about it.

  3. I think the status/stamp on the drawings is irrelevant, particularly with “construction drawings” not being an NEC term. It should have been clear via an instruction that issued the drawings (whatever title they have) as to whether they should have been proceeding with what that drawing is showing. When they were issued as “contract issue” it should have been queried as to what this meant and whether indeed they should have proceeded.

  4. Yes one way or another there should have been one if not two instructions. One not to follow the tender drawings, and then secondly one instruction to say follow the attached drawings - whether they are labelled contract issue or for acceptance or whatever!

I don’t think either party have done very well here to allow this situation to manifest. the contract is there to be followed and create transparency, not to hide behind and play games with.

5

Thanks Glenn, that seems clear to me.

Obviously my first observation is that there should never have been any ambiguity - if the Contractor is in doubt on how they should proceed, these should clarify with the PM.

I think the second thing that is clear is that if the Tender WI is the only WI at the time of the Starting Date, then this is the WI that the Contractor is signed up to (even if they know they are not to build to this WI) and any subsequent revisions marked “Contract”, “For Construction” or otherwise are a change and must therefore be instructed by the PM. Therefore, I imagine it isn’t right for the PM to assert that the ‘Contract-issue’ WI is the first set of WI that the Contractor is contracted to build and doesn’t need to be instructed - it does!

It is not so much the stamp mark says on the WI but when such WI is issued. If issued after the Starting Date it must be instructed.

Hopefully I now understand this correctly. Thanks Glenn.