Still in Summer but already Christmas is in the near distance in the contract world! Working on a NEC3 Option C contract where the Completion Date is 31 August 2020 (today!). Planned Completion is currently the 15 December 2020 (yes there is some delay and Pain!). A CEN has been issued and a quotation sent which may add around 2 weeks to the CD. The Contractor has claimed for their Christamas break given the PC now extends into the new year. Does this entitle the Contractor to claim the Christmas break given the fact that the only reason it extends so long is due to their own delays? Other claims within the quote have also been made for items such as annual price increases, bonuses and winter working. Seems like the client is being expected to cover Contractor shortfalls?
A principle with the ‘target cost’ options (C and D) is that certain risks and rewards are shared between the parties. This could mean accruing a liability when a risk occurs which is ‘owned’ by the other party, which in your case would be where the Contractor did not complete the whole of the works by the Completion Date.
Extending planned Completion over the Christmas period as a result of a compensation event is often a contentious issue. What should be priced, however, is the additional Defined Cost plus Fee due to the effect of the compensation event. The People rates, for staff, should be adjusted to allow only for ‘time worked while they are in the Working Areas’ and applied where cost is incurred ‘in order to Provide the Works’. This would mean that where People are not actually working in the Working Areas in order to Provide the Works, then any assessment should take account of this.
Offset against the above is also the application of any delay damages under secondary option X7, where applicable.
Andrew thank you for your feedback. If Planned Completion was to move by 4 weeks due to the Christmas break (2 week delay & 2 week Christmas) would you expect the Completion Date to move by the same or just 2 weeks of working days?
Neil, the assessed delay to planned Completion is applied to the Completion Date, so you would apply the 4 weeks, if your contract provides for such a break over the Christmas period. For instance the Scope should define hours of working and ‘working day’ which may exclude certain days, such as Bank or Public holidays or possibly the ‘Christmas break’ period, etc. Any ‘additional time’, therefore, is assessed as what is required to complete the additional work, with consideration to any constraints stated in the Scope.
The ‘cost’, however, would be based upon the principles previously discussed so wouldn’t actually reflect a 4 week delay.