NEC3 ECC: How do delays affect target cost?

It is possible that major delays to the work may occur due to some reason. How will the target cost adjustment process scope with the delays?? Are there any contingency plans or fall-back positions which we should consider?

1 Like

It depends who has caused the delay. If the delay is a valid compensation event, then the compensation event should be quoted/priced taking into account the direct cost AND the affect of the delay in planned Completion. This will include “prelim” type costs that you will now genuinely incur for having to be on site longer. The value of this all encompassing compensation event will increase the target cost by that amount, and also move Completion Date by the amount that planned Completion was affected.

If however the delay is not a compensation event, and direct costs will still be recoverable as they will not be disallowed costs. However, you will be eating into your own “gainshare” if you are under target or increasing “pain share” if you are already over target. One thing that is not shared however with option C is Delay Damages which are 100% Contractor liability. Taking this into account up to you as a Contractor whether you want to put contingency plans in place (which will be cheaper?).