NEC ECC: Further procedure still not clear for dispute

NEC3 and NEC4 Contracts Compensation Events
1

Many thanks for your answer Andrew. You are right. The demolition/re-routing works are pre-works but it is not a separate contract. It is an option to the main contract. Under the contract the employer has to provide a clean area for the main-works. The PM instructed us to execute the option for the demolition/re-routing works.

We created together with the Employer the BoQ (both parties were aware that not all works/quantities could be foreseen -> therefore open book) and the employer accepted the Compensation Event. Until today we have many additional and accepted Compensation Events because of bigger foundations, Asbestos, buried tanks, …But this is not the issue.

Both parties have a different point of view concerning the re-routing works of service lines. In the main contract (Works Information) it is mentioned the we have to remove or divert existing services but this is in contradiction with the provision of a clean area. Form our point of view the option is foreseen to clean the area and for the re-routing of service-lines.

We will not get a solution/clarification on short notice.

What I would like to know is correct further proceed according to NEC. To mitigate a potential delay, we are willing to commence the works, but I think the Project Manager has to submit a Project Manager Instruction (to execute the works) for formal reasons.

How we have to proceed to ensure not to lose our right for a later compensation because of formal errors or anything else?

PMI -> notification of a Compensation Event (from our point of view) -> rejection of our CEN by PM (most likely) -> Dispute resolution

Best regards,
Peter

2

Peter,

It is still not clear how the demolition / re-routing works have been implemented. Although you say it is an option under the main contract, the fact that the works have been valued as a BoQ and accepted as a CE, leads me to believe that this is an Option B rather than A as previously stated.

If the main contract Works Information mentions that you have to remove or divert existing services then you would need to consider this requirement (if it is stated as such) and whether it relates to the main contract scope or whether the wording takes account of the demolition / re-routing works option, thereby included as a general statement but not a specific requirement.

You don’t say how the statement of a ‘clean area’ is included in the contract documents or whether this is an implied obligation on the Employer to provide this.

In the absence of clarity of the actual wording it would be difficult to give any advice as any subtle alterations will influence the outcome.

It looks like you are required to undertake this work in any case, so notifying a CE would not help to resolve the situation as it is not a ‘change’ but a required clarification. You could notify an ambiguity or inconsistency under clause 17 if there are conficting statements, which would require a PM response. If the matter requires a change to the Works Information to resolve it (a CE) then you won’t be time barred as the PM should notify this consequent to their response to clause 17.