NEC ECC: Delivery delays

NEC3 and NEC4 Contracts Compensation Events
1

Hi, I m currently working under an ECC Option A contract. For numerous reasons we incurred a longer than anticipated design period. As a result the Client instructed the Contractor through a CE to expedite fabrication of the long lead items, so the Contractor decided purchase the items from abroad. However, when the item was due to be delivered the freight company encountered some issues with customs, plane delays, and various other things out of our control, and the item was delivered a week late.

Due to the inflexibility of the Completion Date we had to then expedite progress on site by working 24/7 shifts, and the Contractor incurred additional labour costs; Who bares the cost of out of hours working is something of a contentious issue as the Client asked the contractor to expedite fabrication, which they did by going abroad, but consequently we encountered third party delays?

2

This looks like an interesting situation but not sure I am going to give the answer you might have hoped for.

The CE to fabricate long lead items was a sensible idea, although the problem with delays due to third parties actions may not be a further compensation event, as the scope of manufacture and delivery to Site was dealt with by the CE. Unless you can link the delay to a CE under the contract then it is essentially a Contractor’s risk.

It also looks like you have no terminal float between planned Completion and the Completion Date which you can use.

This is one of those situations where you do something to ‘help out’ and it backfires on you, but bear in mind that this is a commercial agreement and you should always be mindful of such a position.