NEC3 ECS Omissions and Additions

Hi All,

Potentially a quick question, we’re a subcontractor on an Opt B NEC ECS.
I failed to find anything is the search specifically similar so hoped some guidance would be possible.

We were given a CI (1) to omit a significant amount of completion works in July.
A CE (60 1) was issued and a request for a quotation, which was duly completed and returned.
Presumably the contractor believed they could get the works completed quicker, cheaper by others.

We cancelled the pre-orders we have, stopped progressing any of the works associated with the instruction and re-deployed the resources we had lined up to do the works elsewhere.

We’ve just been issued a second CI (2) adding the works originally omitted back into our scope.
And a PM assessment of the original CE at zero cost nil programme change.
Presumably on the basis they’ve been to the market and found out there would be no benefit to going elsewhere.

Its our position that the zero cost assessment is incorrect, and needs to reflect the negative changes of the CE (1). The later CE (2) assessment then needs to encompass the effects of losing our resources elsewhere and having to re-negotiate market rates with the supply chain for cancelled orders. As well as include the added duration from the dividing date of CE (1) of remobilisation.

Is this the correct methodology ?

Thanks

Hi JohnQS, yes you are correct. The original omission needs to be assessed in accordance with the rules of clause 63 as does the reintroduction for all the reasons you stated. Under the 63.1 it’s the effect of forecast Defined Cost and not a simple omission of the Prices for the work omitted and likewise when adding it back they cannot simply impose the original rates and prices.

Thanks Steve,

We are operating on an amended Z clause that basically says Adds / Omits of similar works will be assessed on the Bill Rates. But in my view CE (1) omits the original works (and corresponding bill rates) CE (2) adds new works, therefore we theoretically have no bill rates for the addition, so the addition needs to be on a forecast of defined cost basis despite the similarity in description to the original BoQ.

John, without seeing it but based on the amendment as you describe, what you say sounds right. It’s always worth looking at how the Z clauses have been drafted, presumably clause 63.1 has been amended by the Z clause to allow what you describe? If so, what does it say in relation to work which has no BOQ rates?

No specific amendments to 63.1 the z clause is a catchall ‘notwithstanding other provisions’ one, whereby if work is similar in condition and quantity to other BoQ items they will form the basis of valuation of change. If there are no BoQ rates valuation would be in line with 63.1

John, based on that amendment what you concluded in the first post is correct. Make sure that the first CE is implemented properly and that the BOQ is amended correctly in accordance with clause 63.13 before assessing the reinstatement CE. Good luck.