NEC Short form Project Managers Assessment query

NEC3 and NEC4 Contracts Compensation Events
1

We were appointed under an NEC3 short contract to a scheme that was priced in January 2019, letter of award November 2019, started on site August 2020 with a 16 week build. The scope fairly straight forward earthworks, with a small element of contractor design works. Approx 4 weeks into the job, we encountered ground subsidence and given no SI we were told to stop works. The project manager took 14 weeks to come up with a solution which was so complicated we issued an early warning that we were appointing a structural engineer as to how we would deliver the works due to the scope changing so much.The client and PM were aware of this, but now are saying we did this at our own risk and their lack of response to our EWN was not an instruction to proceed with the advice. The contract was due to complete on 23.11.20 however the Pm changed the scope again early December and asked us to submit a revised CE for change to the scope. We did so on the 8th January. They are not happy with the price and we submitted sub contract invoices to back up our Costs. Our proposed new finish date is now May 2021. Some 5 and a half months after the initial completion date.
The pM has now done - PM assessment, however they have put a zero through works that were yet to be completed from the pricing schedule and have compiled an assessment with no quotes.
We are wanting to know
1- is the PM allowed to do a project managers assessment with nothing to back it up. No quotes and basically and excel sheet with little substance behind it
2- if the works in the pricing schedule has already started is this not an issue to be dealt with a defined cost +fee rather than zero the remaining quants in the price list?
3- what would be our next move? If we disagree with a PM assessment, is our only option to adjudicate?
4- must we now carry out the works for the monies in the assessment and fight it afterwards?
5 if we know the PM assessment scope is not the same as our CE price what should we do, or is this dealt with through escalation

2

Before I answer your five questions let’s cover a basic point first. You are not obliged to do any additional work without an instruction - see clauses 14.1 and 14.2 so the PM is right that if you have done so then you did it at your own risk. Did the PM not instruct their complicated solution?

Now onto your points:

  1. The Employer is entitled to make an assessment if they don’t agree with your quotation, the assessment is done in accordance with clause 63 and there is no express term requiring them to back it up. This said it sounds like they have given you back-up in the form of a spreadsheet, they aren’t required to justify their assessment with quotations.

  2. If the CE only affects quantities stated in the Price List then rates are used, if not then Defined Cost + OH&P is use.

  3. Try to negotiate with the Employer but if this fails ultimately your only recourse is to adjudication.

  4. Back to my first point, you only carry out works which were in the original Works Information or an instruction from the Employer. If the CE works are covered by this then yes you must complete them and then adjudicate, you would be in breach of contract if you refuse to complete the works.

  5. Same as my last point, you complete the instructed work regardless as to how the CE was assessed. Clause 20.1 states “Contractor Provides the Works in accordance with the Works Information” and an instruction under clause 14.3 can change the Works Information.