NEC3 ECSC: Delay to completion

We are in the situation whereby works on site under an ECSC are fully suspended until such time as the utility providers servicing the site agree wayleaves with the Estate. This is an Employer risk as the Contractor priced on the basis of undertaking the work with permissions in place.

The Contractor has submitted his CE quotation based on a weekly charge essentially for prelims and people (his management staff) costs. The Employer doesn’t accept that he is actually incurring these costs as the staff are engaged on other contracts and not sitting waiting on this project re-starting.

How would Defined Costs in this period of suspension be calculated?

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In an unamended NEC ECSC The subcontractor needs to demonstrate the impact upon his Defined Cost (61.2).and in assessing compensation events

Clause 63.2 the changes to the Prices are assessed by forecasting the effect of a compensation event on Defined Cost or costs which have occurred if the event has already happened.

Clause 63.7 states that assessments are based upon the assumption that the Contractor reacts competently and promptly to the compensation event and that any additional cost and time due to the event is reasonably incurred.

The actual incurred/forecast impact on Defined Cost is how the Contractor should be compensation. The compensation should put him back in the situation he would have been had the event not occurred.