NEC ECC: Ownership of the weather risk and commercial opportunity

NEC3 and NEC4 Contracts
1

Initially the specification stated that the Contractor “will need to make adequate allowance in his demolition programme for down time due to poor weather conditions especially high winds”. The WI also went on to state “The Contractor shall protect the Works from and provide all measures necessary to comply with the Specification for the continuation of work during inclement weather and frost”.

A contract amendment has been issued and agreed half way into the Works given the nature and outcome of design change on this project. For complex reasons the Employer has decided to own the risk of high winds and temperature fluctuations which gives more certainty in the Contractor’s programme and removes their need to over estimate within the new target price arrangement. This project suffers from wind and is subject to many constraints on wind speed depending upon the activities being undertaken as some work can be done in winds gusting to 45mph whilst other work can only be done when winds are below 20mph - all heavily regulated which is why it was easier for the Employer to take this risk on in totality.

The Contractor is now claiming that the Employer “owns” all weather when it was never the intent or has it been stated that this would be the case. The Contractor has been involved in all risk discussions with the Employer (this is a fully integrated project team all working in the same office) and has had the opportunity to contribute to all risk reviews held to establish a new target price, a new programme and assessment and ownership of risk. The Employer is holding that the WI in respect of “inclement weather” has not changed whilst the Contractor is now trying to claim for rain stopping work. This seems like commercial opportunity exploiting an integrated relationship and not working in the spirit of the contract. An excavation crew would not stop digging foundations if rain occurred however that is inclement weather in my view and can be mitigated to some degree.

View appreciated.

2

Without details of the amendment, I cannot give a meaningful / considered comment on whether the Employer or Contractor owns the weather - or to be more precise, to what extent and which weather conditions - either party own weather risk.

What it does seem to me from what you have said is that :

  • the Contractor has a duty and it is within the Prices to take measures to allow work to progress and therefore if they have not, then the “effect of the compensation event” (quoting clause 63.1) would be less;and
  • as well as having a duty in law to mitigate, more explicitly clause 63.7 says “assessments are based upon the assumptions that the Contractor reacts competently and promptly … etc .”; and
  • if you have early warned about them not taking measures, then under clause 61.5 when instructing the first quotation, you notify this and the assessment is reduced under 63.5.
3

Agree with what Jon has said.

It appears that the conflict here stems from what is stated in the specification (WI/Scope) and what constitutes a compensation event (as stated in CD Part 1). As both are Employer provided information perhaps clarify any ambiguity accordingly and then determine what is or isn’t a compensation event.

4

Thanks and understand it’s hard to give full details however I agree with your comments. We will need to clarify ambiguity however the Employer does own the weather risk; it’s a question of what constitutes “weather” and I exclude rain, the Contractor does not! Useful references to the clauses though, thanks.

5

The weather risks are as stated in Contract Data Part 1 (weather measurement and weather data) so refer here for the answer. Rain is a very commonly used weather measurement, often including both the total amount of rainfall and the number of days where rainfall exceeds a certain amount (as stated, say 5mm) per day.