NEC ECC: delay damages against revised programme

A current project (Option B) was due to finish at the end of July. Various Compensation Events were required because of third party elements that caused minor delays to the Completion Date. The PM accepted the CEs and a revised programme was subsequently issued with the Completion Date changed to mid-August. Unfortunately this has not been achieved and the actual handover is likely to be the end of August.

The client (a Health Authority) wants to claim for delay damages from the end of July to when they get possession of the building. They do not accept that the delays were necessary and state that is was made clear when handover was required. Their view is that the Contractor should have employed additional labour to complete the works by the original date.

Should delay damages only apply from the end of the revised programme or from the original date?

It is not the revised programme that agrees/confirms the movement of the compensation event - it is the implementation of the compensation event that does that. Once the PM agrees the value/time implications of a compensation event that should be confirmed in writing which is the “implementation” of the CE. This can then be reflected on the programme. Until the CE’s had been agreed the Contractor would be showing on their programme a later planned Completion, until the CE had been implemented and then they could move Completion date accordingly by the agreed amount.

If the Contractor has had implemented compensation events which agrees movement of the Completion Date from end of July to mid-August then that is now the revised Completion date and the point at which Delay Damages are applicable from. If the end of July was still expected/wanted by the local authority then they should have asked for a quotation to accelerate.

Clause X7.1 states that delay damages are paid by the Contractor “from the Completion Date … until the earlier of Completion and the date on which the Employer takes over the works”.

Both Completion and Completion Date are defined terms under clause 11.2 and clause 63.3 provides a mechanism for calculating delays to the Completion Date due to compensation events.

By apply these clauses you can see that the Contractor is only liable to for delay damages from the revised Completion Date i.e. mid-August, until the end of August (assuming you achieve Completion by then.

You had no obligation to accelerate the works to achieve the original Completion Date of the end of July, however the Employer could have requested this under clause 36 had they wanted you to achieve it. You are late and their remedy for this is the delay damages, they could not and can not force you to accelerate. Note the wording of clause 36.1 only gives the PM the right to instruct a quotation for acceleration and not to instruct an acceleration per se.