NEC ECC: Should the PM issue the COVID-19 CLC guidelines by way as a PMI changing the Scope

NEC3 and NEC4 Contracts Compensation Events
1

If a prevention event has occurred (as a result of the CLC guidelines) the Project Manager under 19.1 gives an instruction to the Contractor stating how he is to deal with this. Should the PM issue the COVID-19 CLC guidelines by way as a PMI & acknowledge this is s a change to the Scope & therefore notify a CE under 60.1.(1).

The above assumed the employers Works Information just asked the Contractor to comply with CDM regs (2015) & the contractors Works Information refers to normal (pre COVID-19) welfare facilities in the construction phase plan.

It could be regarded otherwise under 17.2 that it is impossible for the Contractor to work in accordance with the contract Works Information as it does not refer to the CLC guidelines.

2

All contractors owe a duty of care to their workforce to protect them from the risk of contracting COVID-19, the best way of doing this is to follow the CLC guidelines unless you decide even this presents a risk in which case you could choose to stop work and close the site.

Whether or not the PM instructs you to comply with the guidance you should do so anyway and assess the risk to your workforce of continuing in these circumstances.

The relevant compensation event is clause 60.1(19) which would apply regardless as to PM’s stance on instructing, following the guidance is likely to slow the Contractor down and increase costs which you would be entitled to recover through the compensation event quotation.

3

By ‘COVID-19 CLC’ guidelines, I assume you are referring to the CLC ‘Site Operating Procedures’ document, with version 3 issued on 14 April.

From your reference to CDM Regulations 2015, I am assuming that the Contractor has been appointed as Principal Contractor, so is required under s13 (4) © to provide welfare facilities in accordance with Schedule 2. These facilities are not prescriptive, being described as ‘suitable and sufficient’, presumably so as not to place any limitation or restriction on what is to be provided, which should be based on an assessment of particular risks and circumstances.

Although the ‘Site Operating Procedures’ offer sensible guidance on the practical issues involved with following Public Health England’s guidance, one of the issues is that the requirement for social distancing, that is to maintain 2m between persons, is instructed as guidance in England, unlike in Wales where the requirement was introduced under amended Regulations on 03 April 2020. There are restrictions on movement and gatherings, although this is not the same and there has been some confusion on police powers and what they are actually required to enforce.

Although not mandatory in England, however, a key obligation under CDM Regulations 2015 is that the Principal Contractor is obliged to ensure that a construction site must be, so far as is reasonably practicable, made and kept safe for, and without risks to, the health of a person at work there’ (Part 4 s17 (2)). This requirement must extend to accounting for any matter which could affect the health of persons working on Site, including the risk of being infected from a virus. Consequently the measures detailed in the ‘Site Operating Procedures’ guidance seem sensible in complying with this requirement.

Applying the contract, if the Works Information is prescriptive in the requirement for Welfare facilities, then any such revisions would change this, but whether this would be a Contractor proposal or a PM’s instruction would depend upon how the ‘Site Operating Procedures’ are adopted, including any instruction given by the PM under clause 19.1. Essentially who is responsible for making the change and whether it is a contractual or a health and safety issue.

It may be that, under the circumstances, the contract has been varied, such as a Deed of Variation, possibly in line with the model form issued by the Cabinet Office as part of the revised Guidance Notes associated with Procurement Policy Note 02/20, dated 06 April 2020.

Whatever the situation I would hope both parties have engaged in dialogue to address the matter sensibly, although I appreciate that is not always the case.

4

If 60.1(19) is not relevant because either. 1. it has been omitted as a z clause & 2. because the planned completion date is not affected. Could this then be instructed under 60.1 (1) change in scope?.

Alternatively should the CLC guidelines be treated as a change in law under X2?

5

Thanks your response partly addresses my query.
You are correct in your assumptions on the contractor being the principal contractor & that I was referring to the CLC ‘Site Operating Procedures’ document, with version 3 issued on 14 April.

However, the Works information part 1 is not prescriptive, it merely asks the principal contractor to comply with CDM (2015). The works Information part 2 however includes the construction phase plan which sets out the site operative procedures prior to changes that have been implemented due to the CLC guidelines. Should the PM therefore issue a PMI & notify a CE under 19.1 (1) as a change to the Works Information or is this a contractor risk?

6

Technically the PM could instruct you to comply with CLC guidelines and yes this could be seen as introducing additional constraints which would then lead to CE under clause 60.1(1) however the PM has no obligation to do this. The CLC guidelines are just that, guidance and as such no CE arises under X2.

7

It is not clear what ‘status’ Works Information Part 2 has, as it contains the construction phase plan. This suggests that it contains documents which were prepared subsequent to the contract date, as the construction phase plan is prepared by the Principal Contractor, who is appointed in accordance with Works Information Part 1. Nevertheless, Part 2 appears to be recognised as Works Information under the contract and should, therefore, be appropriately treated as a contract document.

Although the construction phase plan would not, ordinarily, be included as part of the Works Information, the fact that it has means that if a change is required to this, then I would suggest that the Project Manager should instruct this change. This change would not fall under one of the bullet points at clause 60.1 (1), so regardless of any actions under clause 19, it would constitute a change to the Works Information and a compensation event accordingly.