NEC3 ECC: Clarification of who is responsibility for notifying compensation events

Under the NEC3 Contract (Option C): Which compensation events is the Project responsible for notifying, and which compensation events is the Contractor responsible for notifying?

For the compensation events that are the Contractor’s responsibility to notify, does the Project Manager need to take any action if the Contractor doesn’t notify these events?

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The intent is that 12 of the 19 reasons under clause 60.1 the Contractor is obliged to notify within 8 weeks of becoming aware of the event. The assumption otherwise is that the issue concerned did not have an effect on cost or planned Completion. If the Contractor at the end of the project comes with lots of historical “claims” they will be too late for these. There is no particular obligation of the PM to remind the Contractor to notify these, but certainly you would hope in “the spirit” of the Contract they would remind them if they knew they were. The PM will have known it has snowed or rained a lot last month, but will not know if it is a more than 1 in 10 year event for which would then become an Employer risk.

The seven that the Project Manager are obliged to raise are 1,4,7,8,10,15&17 (guidance notes lists these out within 61.1). The Contractor is not time barred on any of these items. All the others they are obligated to notify within 8 weeks. Notification simply requires the Contractor to notify what the event is, an why it is a compensation event.

Glenn, in your response to the question above, you stated that the Contractor is obliged to notify within 8 weeks of becoming aware of the event. How does the qualifying statement in Clause 61.3 “unless the Project Manager should have notified the event to the Contractor but did not.” fit into your response. My understanding from this qualification is that in such instances the PM is obliged to notify the Contractor and the Contractor has no time bar if the PM does not.

Leslie - you are correct that there is no time bar on the Contractor notifying compensation events that the Project Manager was obliged to notify. However, 61.3 emphasizes that the Contractor can notify these in the PM has not, which will then speed up the process of agreeing it is one, quotation, assessment and implementation. Until the event is “implemented” it can not change the Prices (target) so the Contractor will not know where they stand with this event. therefore it is in their interest to notify any events they believe to be one, even for one the PM is obliged. They have nothing to gain by not notifying it themselves. (To emphasise again they are not time barred on these ones, but they will be no doubt more subjective to assess if they only notify at the end of the job.)

Glenn - I fully agree with you that the Contractor should not be complacent when it comes to Clause 61.3, after all, who is to decide whether the PM should have notified the CE or the Contractor, the answer to that could eventually lay in the hands of the Arbitrator or the Judge. To avoid this potential outcome it is very important that the Contractor notifies the PM whenever and as soon as he believes a CE has arisen