I’m currently working on an NEC3 ECC Option A contract where planned Completion is to the right of the Completion Date. The Employer wishes to instruct additional works during this period in which the Contractor is in delay. I understand there is a change to the Works Information and that therefore it is a compensation event. However, the Contractor has returned a programme with their quotation showing that these additional works can run concurrently and complete around the same time as planned Completion - no effect to the Accepted Programme. By instructing these works and implementing a CE, does the Completion Date move to the right to ‘catch up’ with planned Completion or does it remain the same? Many thanks.
What may seem a fairly complex situation is actually very straight forward when you apply clause 63.3. It says that Completion Date moves by the amount that planned Completion moves due to the effect of the compensation event.
Therefore, if planned Completion is already beyond the Completion Date, you see what extra over effect the new compensation event has on planned Completion and then Completion Date (once the CE is implemented) will move by the same amount.
If planned Completion was already two weeks beyond Completion Date, and a new compensation event moves planned Completion by a further week, then Completion Date would also move by one week - leaving the Contractor with the original two week liability they created in the first place. It is up to them to try to mitigate that two weeks or be liable for delay damages.
Hi Glenn. That’s very helpful, thank you. In this case where the additional works run concurrently, what effect does this have on the Contractor’s staff costs? If the Contractor is on site anyway due to their own delay up until planned Completion, are they therefore not entitled to include staff costs for the period of these additional works (the compensation event)? This, coupled with the fact that delay damages will be deducted for the period between Completion Date and planned Completion, would appear very harsh?
You say it is harsh that they would be liable for delay damages, but the fact remains the CE not come along they were still in that position anyway. The same clause protects the Contractor if there is a Client delay and soon afterwards the Contractor has an issue that runs parallel with the initial CE.
The Contractor can only claim any ADDITIONAL staff cost they will incur that they would not have had on site anyway for that period. If the same site team can deal with both then there will be no additional cost that they can claim for.
Afternoon,
Firstly @Glenn_Hide - Many thanks for providing this answer.
Secondly - I have a similar situation however, instead of new works being instructed post Contract Completion/before PC we have had a number of Authority risk events (which would be a CE). I assume that these get assessed in the same manner and if PC has been delayed by a period then Completion is equally shifted.
Many thanks in advance,
Dave
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