NEC3 ECC: What does the Project Manager have the power to instruct?

The Project manager has issued a PMI restricting the working hours and deferring planned works in order to manage fiscal year spend for the employer on their site. The PMI also goes on to state that any hours worked on the project that exceed those contained within the PMI without prior approval will be disallowed. The final paragraph concludes the instruction by saying “this PMI does not constitute as a compensation event”.

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1st sentence : The Project Manager is perfectly entitled to issue an instruction which imposes additional constraints on how the Contractor Provides the Works. This though is a change to the Works Information and therefore a compensation event in under clause 60.1 (1).

2nd sentence : having changed the Works Information, working outside these hours almost certainly falls under the second to last bullet point of clause 11.2 (25) for Disallowed Cost. I.e. Disallowed Cost includes “resources not used to Provide the Works … …”. If you insert the definition of To Provide the Works (clause 11.2 (13)) into this, you get Disallowed Cost is “resource not used to do the work necessary to complete the works in accordance with this contract … …” where ‘contract’ applies to the conditions of contract, Works Information etc.

3rd sentence : the PM would be changing the conditions of contract. He has no authority under the contract to do this. It can only be done by agreement between the Parties (Employer and Contractor) and has to be “agreed, confirmed in writing and signed by the Parties”. See clause 12.3. Consequently, (putting it politely) the statement that “this PMI does not constitute as a compensation event” is not contractually valid. You are therefore entitled to notify as a compensation event and see what the response is !