We are currently carrying out a refurbishment contract under the NEC3 Short Contract (2013). The contract drawings are weak and the pricing schedule is also a poor document. The pricing schedule does not have a preliminaries section within it and as a result our preliminary costs are spread across our rates within the measured works section of the document.
Our main issue is that this schedule has been over measured and now the consultant QS is omitting items from this. As our preliminaries are included within the measured section of the works we feel we are entitled to a compensation event claim for loss of preliminaries under clause 60.1(13) due to the amount of works being omitted. There are substantial preliminary costs associated with the project such as scaffold, cranage and site management and due to these omissions we are losing a significant amount of money.
Are we correct in claiming these lost preliminaries back as a compensation event and is there any scope for us to launch a further claim due to the fact the documents we priced and entered into contract with, were not an accurate reflection of the works that were actually to be carried out on site ?
It sounds like both parties are applying a JCT approach to a NEC!
There are no other provisions for dealing with change in the NEC other than compensation events so all “claims” must be related to a reason at clause 60.1 so in your situation you must demonstrate that either the Works Information changed under clause 60.1(1) or that the quantity changed at clause 60.1(13). NEC contracts do not provide for separate loss and expense or delay and disruption claims, compensation event quotations must therefore factor in all cost associated with the event.
Clause 63.1 explains how you assess the cost impact of the compensation event “by multiplying the changed quantities of work by the appropriate rates in the Price List”. If there is no appropriate rate in the Price List then the assessment is based on Defined Cost plus Fee. You would need to demonstrate that the rates in the Price List are not appropriate to justify not using them. Also you haven’t mentioned the effect of this omission of work on planned Completion, if you’re now going to be on site for a shorter duration then the Defined Cost of your prelims would be reduced and you have no entitlement to be paid the full prelims or to recover the profit you anticipated making.