NEC ECC: Proposed Instruction and Direct Instruction

NEC3 and NEC4 Contracts Compensation Events
1

To ensure I have correctly understood the use of Clauses 61.1 and 61.2 in NEC3 Option B:

I have two scenarios on a current project:

  1. I would like the Contractor to proceed with works immediately and want to instruct the works
  2. I would like the Contractor to provide a quotation for consideration before deciding to proceed.

*** For Scenario 1: Immediately Proceed

  • 14.3: PM gives an instruction to change WI
  • 27.3: Contractor obeys instruction and proceeds with the work
  • 61.1: PM at the time of instruction notified C of this being a CE (60.1 (1))
  • 62.3: Contract provides quotation within 3 weeks of being instructed
  • 62.3: PM has 2 weeks to reply. His reply is either:
    (1) instruction to submit revised quotation but gives reasons for doing so under 62.4,
    (2) acceptance, meaning under 65.1 CE is implemented
    (3) N/A
    (4) notification of making his own assessment, but under 65.1 CE is implemented

*** For Scenario 2: Request quotations

  • 61.2: PM gives instruction to Contractor to submit quotations for a proposed instruction, but as stated within the clause is not to put instruction into effect
  • 62.3: Contract provides quotation within 3 weeks of being instructed
  • 62.3: PM has 2 weeks to reply. His reply is either:

(1) instruction to submit revised quotation but gives reasons for doing so under 62.4,
(2) acceptance of quote, which under 65.1 now means CE is implemented, meaning the contractor is to undertake the works.

  • However, would I be correct in thinking that as the WI is to be changed, this now needs to be instructed by the PM under 14.3, envoking 61.1 and notification of CE.
    However, as a quotation has already been submitted and accepted, the value of the CE is as per the quote submitted when instructed as a proposed instruction, e.g. if C submits cost of £500 as proposed instruction cost, then the CE value under 61.1 is still £500?

(3) notify that the instruction will not be given
(4) notification of making his own assessment, but under 65.1 CE is implemented.
*Similar to point made on (2) above, does this require another instruction 14.3 instructing the change to the WI, and the value of the works will be determined through PMA, hence not the value of proposed instruction submitted by the Contractor, e.g. is C submits cost of £500 as proposed instruction cost, and PM notifies him of intention to PMA, deeming it to be £300, then CE value will be £300.

Advice and clarity on the above greatly appreciated

2

Yes pretty much has you have set out, under NEC3, however.

Under scenario 1, step 4, the CE is implemented when the PM notifies the C of his assessment, not when he notifies of his intention to make an assessment. The C is still obliged to carry out the work.

Under scenario 2, step 2, yes an instruction is still required to change the WI (so that the C can comply with his obligations) which would be a CE but a quotation is not required because it has already been agreed.

Step 4, the CE is not implemented until the PM notifies the C of his assessment. Since the PM is not accepting the C’s quotation then he would have to instruct the works under 14.3 and request a quotation under 61.1. The C would be required to submit a quotation (which may or may not be as for the proposed instruction) and the PM would manage it as scenario 1, he cannot make his own assessment until the C has had the opportunity to submit a quote.