NEC ECC Option A Compensation Event Clause 19 Prevention

NEC3 and NEC4 Contracts Compensation Events
1

Prior to Covid-19 lockdown in April the Project Manager issued an instruction under Cl19 Prevention to delay the Access Date by 8 weeks. This was primarily to mitigate costs to the Principle Contractor and Employer whilst we took cognisance of the guidance being provided by the Government and lock down rules etc

Moving on several weeks and the Principle Contractor is on site and has provided a Compensation Event Quotation which covers the 8 weeks delay. The premise of the CEQ is OK, however as the PM I have issue with the number of staff included within the CEQ.

For example, the PC has included for a full time Commercial Manager and Quantity Surveyor on the scheme. The PC is stating that both are going to be working on the scheme full time and therefore should be recoverable.

The scheme value is circa £7m and in my view does not warrant a full time Commercial Manager and QS. I have therefore PM assessed the Commercial Managers time down to 1 day a week and clarified my assumption by stating that the Commercial Manager will be working on multiple Projects due to their seniority. I have accepted that the QS is working on the scheme full time.

The Principle Contractor is not happy with this decision for obvious reasons. I am therefore seeking further guidance around my rationale, am I correct or not?

Further to this, all staff members included in the CEQ are not listed as named individuals withing the Contract Data.

2

What is reasonable is a question of fact and circumstance, it will be different on different projects. For example if the Contractor had provided information about how they would resource the project at tender stage which included a full time commercial manager then it would be difficult to argue against this.

If you are happy with your assessment then implement it, you don’t need the Contractor’s agreement to it. Then if they’re still not happy they can escalate to Senior Representatives (in NEC4) or adjudication. You have to ask yourself what an independent third party who was cognisant of all the facts would think if it came before them.

The fact that the people were not listed in the Contract Data is irrelevant, the Contractor only has to enter who they think are their key people, not every last Tom, Dick and Harry.

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