Does the Project Manager have to base payment of the Contractors P & G costs on actuals and not as per contract rates should the original completion date not be achieved due to fault of the Employer by delaying work, issuing of instructions etc.
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Can you clarify what you mean by P&G costs
is this referring to pain and gain on ECC main Option C?
A little more background: The Contract is ECC option B, priced BOQ. In the Preliminary and General time related items there is provision made for cranes and IFL (indirect field labour supervision). The Contract moved past the original contract period due to some delays in the contractors control but mostly within the Employers control. The Contractor changed the crane sizes without notifying the Project Manager. The Contractor is now claiming actuals for all cranes used past the original completions date, which is more than what was provided for in the contract for cranes on a weekly basis. The same is claimed for the contractors IFL. The Contractor claims that he is currently utilizing a lot more people that what is stated in the contract and claims for actual hours spent by the IFL. Is the Contractor entitled to claiming for these “actuals” utilized past the original completion date or can he be remunerated in accordance with the weekly rates provided for in the contract?
A little more background: The Contract is ECC option B, priced BOQ. In the Preliminary and General time related items there is provision made for cranes and IFL (indirect field labour supervision). The Contract moved past the original contract period due to some delays in the contractors control but mostly within the Employers control. The Contractor changed the crane sizes without notifying the Project Manager. The Contractor is now claiming actuals for all cranes used past the original completions date, which is more than what was provided for in the contract for cranes on a weekly basis. The same is claimed for the contractors IFL. The Contractor claims that he is currently utilizing a lot more people that what is stated in the contract and claims for actual hours spent by the IFL. Is the Contractor entitled to claiming for these “actuals” utilized past the original completion date or can he be remunerated in accordance with the weekly rates provided for in the contract?
Paul
I have a very similar situation where the Employer has caused delay and the “planned completion” date has been delayed. I say planned completion because that is the term used under NEC3.
The position also depends on whether the P&G costs are re-measurable or whether they are fixed. If fixed, the adjustment is purely based on time. If the extension of time is 2 weeks, the entitlement to additional compensation is 2 weeks at the BQ rates. This is on the basis that the contractor takes the risk as to adequacy of his P&G items.
If re-measurable, then it can be argued that the risk passes to the Employer under the principle that the Employer caused delay, and probably, disruption. On that basis the change to the P&G items would be recoverable.
All this is of course subject to the basic principle of NEC that the contractor provides a quotation for a compensation event (a delay by the employer 60.1(2/3) or Others do not 60.1.5 for example) which is a forecast of the compensation he requires for the CE - see particularly clause 63.1.
I hope that helps a little. Geoff