NEC: How Does Government Guidance Affect a contract COVID 19 UK

During the current Covid 19 pandemic alot of guidance has been provided by the UK government. In some cases this guidance has been contradictive is some instances such as the shutting of non essential construction sites from the scottish FM and the PM. Most establishments have taken to try and undertake social distancing and other guidance from the government such as self isolation. However contracting firms and clients have not decided to close sites and operatives and subcontractrs are now leaving sites due the government guidance and personal safety. How is this type of event dealt with as the guidance is changing constantly and how is a CE meant to be assessed and/or submitted without knowing how this pandemic may progress?

Step 1 with NEC is the clause 16 (NEC3) early warning mechanism, hopefully every NEC project in the land has by now seen one in relation to COVID-19 and I’d be expecting parties to be having daily risk reduction meetings to discuss latest events and how to respond to them.

Step 2 is the CEN, depending on the facts on a particular project the Contractor may have up to 8 weeks from being aware of the event to notify this. If the event is related to an instruction from the PM (say under clause 19.1) then the PM should notify this as a CE and the 8 week time bar is inoperative, the Contractor merely needs to get on and submit a quotation. If however there is no instruction then it will be debatable when the 8 weeks for the Contractor’s notification expires therefore if I was a cautious Contractor I’d be looking at doing this no later than say the end of this week as that’ll be within 8 weeks of when the Health Protection (Coronavirus) Regulations 2020 came into force. This said it may be possible to argue it was a point after this however why risk the argument?

Step 3 is then the CEQ or the quotation, as no one knows how long the current situation will last for PMs should be using clause 61.6 and state assumptions about the event as the effects are too uncertain to be reasonably forecast. For example it could be assumed that work will be able to recommence on site 12 weeks after 19th March which is when Boris said we’d be able to turn the tide on the outbreak however it’s up to the PM (that is the Project Manager not the Prime Minister!) to assess the likelihood of this. Note that if the assumption is later corrected [clause 60.1(17)] then the Prices are reduced [clauses 63.10 or 63.11 depending on main Option] if the total Defined Cost is reduced however the Completion Date will remain unaffected.