NEC3 ECC Option A - Delivery location of free issue materials

NEC3 and NEC4 Contracts Compensation Events
1

Hello,

We have the following scenario on a project;

  • Works Info states item to be free issued by the Employer.
  • Item is delivered to site compound.
  • Contractor submits Notification to say that they believe the movement of the item from the compound to the workface is a CE as the Works Info is mute on exact delivery location. Not insignificant temporary works required to facilitate movement of free issue item.

Should an experienced Contractor know that materials are likely to be delivered to the compound, rather than the workface?

NB Cl17.1 has following text added to the end “Notwithstanding any other provision of this contract, any such ambiguity, inconsistency and/or instruction is not a compensation event, and does
not result in any increase in the Prices or any delay to the Completion Date or to any Key Date.”

The amendment to Cl17.1 suggests to me that the only avenue to a CE (PMI correcting an ambiguity) has been closed off anyway.

Appreciate any thoughts.

2

I don’t think it’s a matter of what an experienced Contractor should or should not know it is what the contract stated. If it was unclear as to where the material would be delivered and be mindful of the amendment to 17.1, the Contractor should have asked for clarification at tender stage.
For an event to be a compensation event it has to be one of the events are listed in the contract, the event notified by the Contractor would not on its own qualify. It is clear that the Contractor is saying that the WI is ambiguous and therefore they should notify the ambiguity to the PM and the PM should resolve the ambiguity. Clearly the exclusion in 17.1 prevents any subsequent instruction from being a compensation event.
The only recourse here for the Contractor would be to refer a dispute to the Adjudicator, but on what grounds? That the amendment is not fair?
This is where it all gets legal and I am not a lawyer but I think that to be successful in this they would have to argue and win a complex legal issue over whether the exclusion could be ruled out under the Unfair Contract Terms Act, very difficult as it is a commercial contract and the Parties sign it with their eyes open. I believe a Party is allowed to exclude liability and evade the rule of contra proferentem provided they do so in clear wording, the amendment seems pretty clear. I believe there are exceptions to this but again, you need to speak to a lawyer.

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