NEC ECC: Delay Damage liability to Contractor when Employer cannot give access to the network

Under option C, Contractor has missed the Completion Date with X7 attached. DD’s are being deducted however the project is on a utility network. The work has not been completed but the Employer has had to take back the (power) network to maintain its service.

Owing to system constraints “outges” are not available in the winter. This means that the Employer is only able to give access when it can in spring.

Access on the tender and subsequent accepted programme was only ever for a finite period which was missed by the Contractor. The Contractor is also aware from years of experience that access to the network is not easily obtainable and involves delicate calculation of other loads on the network on a national basis.

It is legitimate to continue to deduct DD’s until it is possible to allow the works to be completed or does this become a prevention event if access has to be withdrawn?

All of the accesses that were planned were provided on time and no Employer hindrance took place prior to the issued Completion Date.

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I am inclined to say that you can continue to deduct LDs until Completion is actually achieved.

Having said this, however, I would advise carefully examining the conditions of contract with regard to the process of applying for and obtaining appropriate outages, as your contract should have been amended to include this, especially clauses 33 and 60.1 (2).

From my experience with similar issues (outages and possessions on railway engineering projects) it is possible that the door may have been left open for a compensation event.

It sounds like the project may be complete as defined in the contract, albeit with Defects.

The test you apply to establish if Completion has been achieved or not is found at clause 11.2(2) - in the final paragraph (which usually applies as most contracts don’t state what’s required in the Works Information) “Completion is when the Contractor has done all the work necessary for the Employer to use the works and for Others to do their work”.

Your question isn’t entirely clear about if the Employer is using the works or not?

Remember the term works is an identified term, the meaning of which is found in CD part one. If they are using the works then Completion has been achieved and the Contractor’s liability for delay damages ended at the point take over occurred. If only partial take over occurred then the delay damages are reduced proportionally in accordance with X7.3.

If the Employer isn’t using the works at all then the full amount of damages would normally be deducted, however the prevention of access may have triggered a compensation event under clause 60.1(2) or even 60.1(18). A compensation event would entitle the Contractor for an extension of time as well as cost and delay damages can’t be deducted during the extended period.