NEC ECC: The problem with time barring under cl 61.3

An issue occurred on site which caused the job to halt pending an investigation into safety concerns. A couple of days later the job was allowed to continue albeit on a reduced basis. Two weeks later the Contractor issued an EWN stating that a problem had occurred and it would instigate a full root cause review. Interestingly the EWN highlighted no delay to completion or meeting a key date but it did state what had failed and stated this had not been immediately apparent at the time.

The Employer has always believed this is a design issue since the failure is related to equipment designed by the Contractor - this is a design and demolition project. The notification of compensation event has just been issued by the Contractor some 4.5 months after the event occurred. The Contractor, realising this, has stated that it was the conclusion of their report that alerted them to this being a CE under 60.1. Remarkably this report was issued 6 weeks ago.

So should the Employer have notified or is he exempt from doing so leaving it up to the Contractor. Surely the excuse in using their report to trigger the CE is contractually incorrect since they stated on their EWN the cause of the event. If the Employer is to time bar this he has to be certain that he didn’t have to notify in this case and there is no moral high ground issue here e.g. time barring because it’s easy etc.

A couple of points to note;

An EWN is not a compensation event notification,
The ‘time bar’ under clause 61.3 starts when the Contractor becomes aware that the event occurred, irrespective of when they believe that it constitutes a compensation event.

The ‘time bar’ issue may not be the only response, as the PM can notify under clause 61.4, 1st bullet, that the event arises from a fault of the Contractor, so the Prices, Completion Date and Key Date are not to be changed…

I am also assuming that the Contractor has clearly explained why they believe the matter is a change to the Works Information, within their notification.

Yes they have and they cite 60.1(12) 3rd bullet point albeit the Employer feels this is incorrect as it’s a design fault issue. The Contractor, however, is blaming poor works information at tender which he now claims supports his design and is the cause of the event. Sorry this issue is very complex but I appreciate and agree with your answer.

The problem with citing the 3rd bullet of 60.1 (12) is that they automatically fall into the ‘time bar’ trap, so perhaps not a good move, irrespective of any design issues.

I can certainly sympathise with poor Employer provided Works Information, although that should have provided a clear incentive to protect their commercial position by administering the contract intelligently from Day 1.

This is becoming interesting so I will provide a little more detail. The contract is to demolish a 50 year old concrete stack which is 60m tall and sits on top of a 60m tall building. The spec at tender told the contractor that he needed to do a job specific survey which would identify amongst many other things the condition and construction of the structure, requirements for additional strengthening work and physical constraints and/or obstructions. The winning bidder (our contractor) elected not to do this. 9 years down the line after he has designed, built and deployed the platform that is attached to the stack to allow demolition, he now says that he couldn’t do a survey. Nowhere does it state in his tender that this was the case nor did he cite clause 18.1 if he felt that was relevant. So this has nothing to do with poor WI. So him citing clause 60.1(12) and in particular the 3rd bullet surely renders his case obsolete because he could be judged to have expected certain conditions which he could have allowed for - it’s a 50 year old concrete stack built to old parameters and has been exposed to the sea air ever since. The fundamental issue is all about smoothness of the concrete and verticality of the stack so as the pads that part hold the platform to the stack have as close to 100% contact as possible.

Just a point on what you say; how does his citing the above CE clause automatically drop him into the time bar trap?

I obviously appreciate it is difficult to precisely define the issue without some background information and it is not always a straightforward issue anyway.

My ‘time bar trap’ comment was that the 8 weeks commences when the Contractor is aware of the event, not that he is aware that it is a compensation event. Without knowing more detail I can’t say when the Contractor became aware of the event, but it does seem that he now claims to have made certain assumptions as an ‘experienced contractor’ which were not correct.

As you say a 50 year old structure in an exposed location would be expected to show signs of degradation. Perhaps ask the Contractor to provide details of what he made allowance for in his tender and why he believes the matter to be a ‘physical condition’ CE.

Thank you for your continued responses and suggestions. The contractor’s issue relates to actuators that pull up the restraining bands that raise the platform and the fact that one of them snapped at a clevis joint. They say that is because information wasn’t available that accounted for localised variances in the angle of the concrete windshield and that directed, in some part, their design of these actuators. How that is the case I do not know however they were told the overall vertical angle of the stack. Then they say the conditions encountered were different and were beyond their reasonable expectation, such is the reference to clause 60.1 (12). So if a pad sits across, say, a small concrete or aggregate bulge or an indent then sufficient contact with the stack isn’t being made. This has put undue pressure on the actuators such that a failure has occurred. For this to be designed out you’d have to have a detailed set of close up photos of every square inch of the surface OR expect an experienced contractor to expect roughness etc and design tolerances around that. However the spec states the contractor has to do his own job specific survey and they knew this was a 50 year old stack. This is an extremely difficult issue to communicate however I see the fundamental issue as one of contract compliance and notification of an event, something the contractor did not do in the time frame allowed.
Trust this has been of interest.