We have a site which has suffered Employer delays. Our Contractor has submitted quotations for what they are claiming the effect of the compensation events to be. One of the items within the quotation, is a change in sub-contractor (new sub-contractor is more expensive that the original sub-contractor) & the associated delay period to re-tender the works.
We have a loose letter from the subbie which states they are returning the Sub-Contract unsigned and withdrawing from the works citing they need to focus their efforts on one of the other sites they are also working on (under the same contract).
Would you accept the delay / increase in sub-contract costs as being part of the compensation event.
In principle ‘Yes’ I would provided the Contractor is acting in accordance with clause 63.7 of the NEC3 Engineering & Construction Contract - I assume it is NEC3 and not 4 by your use of the word ‘Employer’, but the equivalent clause is in NEC4 ECCis 63.9.
NEC3 clause 63.7 says:
“Assessments are based upon the assumptions that the Contractor reacts competently and promptly to the compensation event, that any Defined Cost and time due to the event are reasonably incurred and that the Accepted Programme can be changed.”
I.e. they are actively trying to source an alternative subbie.
In addition, they have a duty to mitigate in law.
The one proviso to this is that if the Subcontractor has already started work on that bit of work then, even though they have not signed the contract, they have effectively accepted its terms by conduct. But if the Contractor is doing its best, I would not punish the Contractor for that.