NEC ECC: For a CE notified by a Contractor [61.3], if it is clear that PM must assess the CE himself anwyay under [64.1 bp 3 and 64.2 bp 2] why does the PM still need to instruct the Contractor to submit quotation(s) under 61.4?

Apologies if this has been asked (I looked) and bear with me I am new to the NEC3 (but not to Contracts). I am struggling with a concept.

[64.1 bp 3] requires the PM to assess the CE “if, when the Contractor submits quotations” no programme has been submitted. Under [64.3] the PM is required to assess the CE “within the period allowed for the Contractor’s submission of his quotation” i.e. within 3 weeks from the instruction to submit quotations.

However if it is clear that there is a need for essentially a unilateral assessment by the PM (of the CE and of the program), why does the PM still have to instruct the Contractor to submit quotations [61.4 2nd Para. bullet point 1 and 2]?

Apart from fulfilling (i) the “Yes/No” determination in [64.1] being the submittal (only) of quotations and (ii) setting a starting point for the 3 weeks under [64.3] and (iii) forming (presumably) the basis of an automatic fall-back of treated acceptance under 64.4, IF the PM makes his assessment on time and notifies it under [65.1], what purpose does this Contractors quotation actually serve in this instance?

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The contract for each compensation event allows the Contractor to submit a quotation to present their version of entitlement. The Project Manager is then entitled to make their own assessment if they don’t agree with it. In any event, it is easier to see what they don’t agree with, rather than start from a clean piece of paper themselves.

In any event, nothing to stop the PM starting to make their own assessment whilst the Contractor is doing theirs and compare when the Contractor submits theirs. 64.1 is simply saying that if the PM has not accepted the latest programme (or they have not submitted one) then they are entitled to make their own assessment as you may well not agree with the time element.

Thank you for taking the time to respond Glenn, much appreciated. As I said I am new to NEC and I find discussion on this site very useful.

For the record I am not the Contractor in this (hypothetical) scenario, rather PM/Client side, but whilst I agree that the Contractor issuing a quotation would do no harm and would likely be useful to the PM, I would like to comment on the response as follows:

  1. You note that the " The Project Manager is then entitled to make their own assessment"; surely absent a Program (none, or none accepted) there is no “entitlement” at play here, rather there is an obligation (64.1 bullets 3 and 4) on the PM to reject (not accept) the quotation and make his own assessment; indeed NEC requires it BUT this only AFTER the Contractor submits a quotation, so clearly the administrative logic is that the PM must FIRST instruct a quotation (for the PM to receive it).

  2. This brings me to my second question (and apologies if my original question was poorly phrased), which is more along the lines of the philosophy behind the PM being required to issue an instruction to the C to submit a quotation under 61.4 in the FIRST place, (apart from the sanctions of deemed acceptance after a further 2 weeks in the same clause 61.4 if he does not), when the PM is fully aware (due to no submitted programme) at the time of issue of the quote that he must reject it (see ref. 1 from the NEC) and advise the C he will assess the CE himself.

i.e. apart from the administrative logic in my original query (i) to (iii) and the sanction above (also administrative) why does the NEC Contract require the PM to instruct the Contractor to do a lot of work preparing a quote when BOTH parties know it must be summarily rejected (not accepted)? See the NEC’s own FAQ on this in ref. 1?

ref1. notes “Without an accepted programme the assessment of all compensation events is taken out of the hands of the contractor altogether. The project manager is required to reject all compensation event quotations and make his or her own assessment of each compensation event - see the 3rd and 4th bullet points of clause 64.1. That assessment must be made using the project managers assessment of the programme of the remaining works - see clause 64.2”

Thank you again, Kristian

Great points - but I don’t agree with the NEC statement that they are REQUIRED to reject all CE’s and assess themselves. It is often the case that a Project Manager has rejected a programme and sometimes for several periods, but rare in practice that they will then unilaterally make their own assessment of every CE. For one that is a lot of work to do, and you would want the Contractor’s quote to start with to amend as that is a lot easier than starting from a blank piece of paper (i.e. it is always easier to critique someone else’s work, even if you would not necessarily have done a better job yourself!)

Cutting through all the CE clauses I would want a quote from a Contractor on which to base my own assessment (in terms of cost and time), and only if I did not agree with the quote or one was not forthcoming and well overdue would i want to step in and make my own assessment. You are right, that in theory they are OBLIGED to do it - but no real contractual remedy if they fail to do so. If the Contractor has not submitted a quote either there would be nothing to deem accepted.

Thanks Glenn; a practical response as ever, so let’s leave it at that. The NEC is supposed to offer simplicity and clarity and while for the most part it does, on this section I think it’s not quite as clear as I would have hoped, so I was looking to test the obligations and draw out some underlying reasons for them. Thank you again. Kristian.

Glenn, I have to disagree with you as to what the contract requires. The contract wording clearly differentiates between requirements and entitlements, for example in NEC3 Clause 62.6 if the PM doesn’t reply to a quotation the Contractor MAY notify the PM of the failure. This is an entitlement and not a requirement.

When it comes to Clause 64.1, however, the wording is that the PM assesses the CE if, when the Contractor submits quotations, the PM has not accepted the latest programme for one of the reasons stated in the contract. There is no ‘may’ here, so the PM is required to assess.

I agree absolutely with your comment that this isn’t what happens in practice, but it is what the contract says.

I also agree absolutely that the PM would want to have the Contractor’s quotation in order to inform his assessment. I think it would be very difficult for a PM (particularly on Option A or B where he has no visibility of the Contractor’s actual costs) to assess a CE without a quotation.

Dave you are of course right and I agree. I use the word “entitled” in a practical sense rather than a contractual sense. It still doesn’t change the advise though, but well pointed out to bring this all round discussion into context.