NEC3 ECC: CEs over Christmas

NEC3 and NEC4 Contracts Compensation Events
1

We have a scheme where as a result of a relatively small CE and resulting delay, the Completion Date has gone from 18 December into the first week in January. There are obviously some bank holidays between these dates but the rest of time is as a result of the Contractor choosing to close down.

I can understand why the site has been closed but under option A, can the Contractor then claim for all of their costs over the Christmas period, for example leaving the welfare on site, traffic management etc, for the whole of this period?

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2

My view would be ‘Yes’, as it is standard industry practice to close down and this would be reinforced if the Contractor’s Accepted Programme shows him de-mobilising etc. before Xmas.

However, as a Project Manager, you are entitled to instruct quotations for different ways of dealing with the compensation event which are practical, after first discussing them with the Contractor - see clause 62.1.

This could include :

  • paying overtime to people for working just over Xmas to de-mobilise the Site; or
  • more likely, given as you say relatively minor compensation event, paying for either additional resources to be brought in &/or existing resources to work over weekends etc.

These may well turn out to be cheaper than maintaining the Site over the Xmas break.

3

I have talked this over with a couple of other contributors and altered my view. In a strict contractual sense, if nothing is stated in the Works Information about the Contractor not being able to work in this period, then the Employer could insist on the Contractor working in this period. However, the Contractor could mount some counter-arguments such as :

  • my current Accepted Programme shows me demobilising at this time and, as I effectively own the terminal float under the ECC, not only will I get the Completion Date moved back, but you will have to pay the additional site based Defined Costs.
  • my current working agreements do not allow me to insist on people working over the Xmas period;
  • I may be able to get them to work, but I have to pay a lot extra i.e. my Defined Costs increase massively and as it is due to a CE, you have to pay.

Given this, the sensible solution is probably as per my original answer. Talk through the different options of dealing with this, narrow it down to the sensible ones which match the Employer’s objectives and price the up the feasible / most promising ones.