NEC3 ECC: Assessment of the Effect of Weather on a Delayed Activity

Currently in discussion over the assessment of a CE for the impact of weather. Option C Contract with a 100% pain trigger over a certain level of cost overspend. The commencement of a major section of the works was delayed as the Employer was unable to provide access. (planned to be undertaken April - August), actually July to January, predominantly earthworks operations)The assessment is being made retrospectively to the execution of the works.
Our (the Contractor) assessment includes losses suffered due to inclement weather during the execution of that section of the works. Our assessment is not based on all the losses suffered but on the basis that the actual losses suffered due to weather were greater than those that would have been suffered had the works been undertaken in the planned window. Our assessment being based on a comparison of the actual weather data recorded during the original programme window and the actual weather data recorded during the actual programme window i.e. assessment of the effect of the event on Defined Cost. The PM argues that our approach is incorrect as within our Price (and/or defined cost rates) for the Work we are deemed to have included the risk up to a 1:10 weather occurrence and therefore as a 1:10 event did not occur we already have the monies in our Price to cover the losses suffered. His argument then moves onto; 'the actual weather suffered in the revised programme window was no worse than it could have been (based on the 1:10 weather data for the intended programme window) and so there is no loss. Getting very frustrating!!!

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I am not sure why the PM is looking at 60.1(13) here which is what drives the 1 in 10 event assessment of the CE. As you have described it this is not a 60.1(13) CE it is a 60.1(2) delayed access CE which you then go on to forecast. It is complicated by the fact that you don’t seem to have followed the contract and are now looking back with actual data rather than doing a forecast.

Doing it properly under the Contract you would have forecast the direct and risk consequences of the delayed start. Part of that would certainly be a change in weather conditions. You would not look at the 1 in 10 measure but what would be reasonable to expect as the change due to the change in date. As a forecast you might therefore want to look at the differences in the 1 in 10 data as a baseline expectation and then build risk around that.

However, given that you are now trying to evaluate the event with actual knowledge I think your approach is probably appropriate as it mimics the contract (if you got your risk analys8is perfectly correct you would have achieved the result that in fact occurred) but it also leaves the event risk and cost neutral overall for the contractor who is, after all, being compensated for an Employer risk event.

I can see where the PM is coming from in his follow up argument but that still misses the point that the RISK to the contractor has changed and that should have been dealt with or the reality was different (ie your method) and therefor that should be the basis. You really cannot mix and match approaches just to achieve a lower cost outcome.

I would add to Rob’s point about mix’n’matching : Costain vs. Bechtel confirmed that “in matters of assessment” (of compensation events) “and certification” (of payments), the PM is to act as an “impartial administrator” of the contract. Picking & choosing to get the lowest cost to the Employer sits neither in that spirit or the express wording of the contract.