NEC3 ECC Negative Compensation Event Impact on Programme

Hello again, recent discussion with the Contractor on a negative compensation event that released 6 weeks of time from the programme. The Contractor believes he is entitled to the 6 weeks to be added to his Terminal Float, providing 9 weeks of terminal float. I (the PM) would like to see the time moved to Total Float so that both parties get to share the additional time on a first come first served basis and be used to absorb any delays or changes that may come.

The Contractor has already used up the 2 months Total Float in the original programme by delaying his start on site by 2 months, I feel it is a little unfair on the Employer that the Employer has removed scope to ensure the works are completed on time and is now being penalised by having to give the 6 weeks of time saved back to the Contractor who initially caused the delay by using up 2 months of Total Float originally provided.

What is the official use of time saved?

One example gives the time saved back as Terminal Float as a means to ensure that the Employer will not remove scope and then try and add scope back at a later date with no affect on the Planned Completion date, it will push the planned completion date back out beyond the original date.

If I have to give it back I will, it just appears a little unfair given the Total Float in the original programme has been wasted before the work has started.

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The Contractor is correct, de-scoping works will reduce Defined Cost but not affect the Completion Date, it’s up to the Contractor to choose how he uses the time, he can choose to finish earlier and move planned Completion back or re-programme and use the float to finish on or before the Completion Date. Clause 63.3 makes this so as it only deals with delay and planned Completion finishing later than planned Completion shown on the Accepted Programme as a result of the compensation event.

The Contractor has done nothing wrong by using float in the original programme in the way you describe - it is his to use as he pleases. Fairness has nothing to do with it, it’s what the contract says. If the Contractor agreed to go along with what you want and the PM introduced additional scope and the Contractor was then delayed to make him late would you feel this was unfair as well?

To my mind more effort should have been put in at the pre-contract stage to ensure the scope was clear and the programme understood so that a realistic Completion Date was set from the outset.

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Thanks Neil. Taking on board your comments, if the CE was PM assessed in lieu of Contractor, the PM could then chose where the 6 weeks of time was to be utilised in the programme? Nothing precludes the PM from assessing the time as the Contractor would?

I agree with you about better use of the time in the pre construction stage, unfortunately the Contractor did not agree contract terms with the supply chain during the pre construction stage which lead to the construction phase being utilised.