NEC ECC: Equipment Minimum Hire Period and CECA

We recently mobilised to site to carry out contract works and on the first day were instructed by our client to cease the works due to H&S concerns.

The equipment on hire for said works carries a minimum hire charge of one week and the agreed rates in the SSOCC for equipment is CECA.

Our client is only prepared to pay us for one day’s cost at CECA rates or reimbursement of actual cost.

What is actual our entitlement?

You should be able to claim the cost that you have incurred as a result of that compensation event. If you can demonstrate that it was on a minimum one week hire then that is what should be assessed as part of the compensation event.

Thanks for your response Glenn.

So regardless of actual cost, if we provide invoices to demonstrate the hire period, we can value the CE using the agreed schedule, CECA?

Surely your actual cost will demonstrate the minimum one week hire period anyway? The idea is that with a compensation event you get the genuine cost that you have incurred assuming you managed the works efficiently and promptly. It is not intended that you lose out because of a compensation event, nor should you be able make your millions either!

Yes, our actual cost will show this however, as we mobilised and demobilised in the same day, our client is only prepared to pay for a one day 'delay’period. I’m more concerned about contractual entitlement, regardless of whether we’d be making or losing money. Circumstances are: we land on a Monday, get told to stop the works and demob on the same day and then have to pay hire on equipment Monday to Friday.

Is your opinion still the same?

Yes my opinion is still the same - as long as you can clearly demonstrate why you are incurring hire costs for a full week and that it was a sensible decision at the time to have to book it for a full week.

It is a bit like a Client only wanting to pay for an operative for one hour to carry out a compensation event, when they have had to be employed for a full day to do that important one hour piece of work. If they cant do anything else that day they should be paid for the full shift.