NEC ECC Option A. My question relates to the assessment and therefore payment for defective works requested by the Works Information such as:
a) issuing a programme every 3 weeks,
b) progress reports every 2 weeks,
c) site diaries, progress photographs etc…
d) attend an audit when requested,
The Contractor has failed to issue the above documents or attend the audit throughout the contract period, the above have been notified as defective works.
I have requested that the defective ‘prelim’ works be broken down in the Activity Schedule to provide clarity on complete and incomplete tasks for payment.
Can I (as the PM) assess the value of the defective works by raising a Compensation Event to change the Works Information and remove the requirement of the defective works, and therefore recover the cost of the tasks that we not completed by the Contractor?
Because the tasks were time based and that time has now passed, there is no way for the Contractor to rectify the defect?
You could quite rightly change the Works Information so it is no longer required. That would, in all likelihood, be a negative compensation event. The assessment would be based on the time that you make it, by which I mean the reduced Defined Cost to the Contractor at the time of the instruction of not having to provide these things, both from historical and going forward.
You would therefore need to have some justification for this reduced Defined Cost e.g. there would be one less person within the Working Areas for which they are not paying a salary. If the same people would have been in the WAs being paid the same amount, then there is no reduced Defined Cost.
Thanks John, the saving wouldn’t be as much as 1FTE (Full Time Employee), but it would reduce the 100% figure I am paying for across multiple FTE’s.
It would appear that there is no direct reason for paying for the time/ defective works and therefore (as you say) a negative compensation event can be issued against each defect that cannot be completed as per the Works Information.