We are a Contractor on an NEC3 Option A infrastructure project.
The contract includes a number of access dates for individual stretches of pavement.
Access has been provided for all stretches as per the contract. However access to the final portion of pavement has been given approximately 2 months early, meaning we will be able to finish the entire contract works 2 months early (May-21 instead of the contract completion date which is July-21).
Our activity schedule includes individual lines for monthly Prelims over the duration of the job.
The employer (via the PM) is saying that because we will be finishing 2 months early, we should not claim the Prelims activities for June and July as we will be finished and off site.
Do they have any basis for this contractually and how should we respond.
There is no provision in the standard contract for bringing an access date forward and equally it would not be a compensation event.
The Activity Schedule and the total of the Prices can only be changed in accordance with the contract (11.2(20) and 11.2(30)) and this would generally be by way of a revised Activity Schedule (not changing the total of the Prices) under clause 54.2 or a compensation event (changing the total of the Prices) clause 63.12.
Neither of these clauses are applicable and therefore doing the work early and reducing your Prelims value is a matter for you to decide on.
If you were agreeable, then the PM could request a quotation for acceleration under clause 36.1 with the subsequent quotation being the agreed reduction. Alternatively, it would have to be an agreement between the Contractor and the Employer under 12.3 and captured in writing.
Thanks Dave. If we decided that we didn’t want to reduce the Prelims and these circumstances don’t allow us to revise the activity schedule, how would we get paid for the final two months Prelims (those two activities would never be completed).
I see no reason why you shouldn’t be paid the preliminaries for these two months.
As Dave has said there is no contractual provision for bringing an access date forward, except via a contract variation, although it can be moved backwards with a later date shown on the Accepted Programme.
Regular payment assessments occur until 4 weeks after the Defects Certificate is issued, with a supplementary assessment at Completion of the whole of the works. Payment assessments, therefore, continue after Completion, whenever that is certified, and assessed in accordance with the definition of PWDD. In your case the payment assessment is based upon a completed activity, with the activities in question completed once the associated time has passed, (Jun-21, Jul-21), irrespective of whether any actual ‘physical’ work is done.
If the Employer believes that this is ‘unfair’ then they should have correctly administered the process for bringing the access date forward, which would have been via a contract variation, including a corresponding adjustment of preliminaries.
Just so I’m clear, would we be able to revise the activity schedule under 54.2 i.e. redistributing the remaining Prelims over a shorter period and to align with the Accepted Programme, or is this situation not considered a change to the planned method of working?
The change to the Activity Schedule is where the Contractor changes a planned method of working at his discretion. This situation would be a change to the planned method of working and as you chose to make use of the earlier available access then it would also be at your discretion, or choice.
The submission of a revised Activity Schedule is conditional upon the above ‘tests’, therefore you would be obliged to submit a revised version, re-distributing the preliminaries accordingly.
Thanks Andrew. I wanted some clarity on that because Dave intimated in the first answer that revising the Activity Schedule would not be appropriate in these circumstances.
I think Dave was suggesting that the matter was not a compensation event, so the Prices are not changed.
Whether the Activity Schedule is changed or not, you would still be entitled to payment of the 2 months of preliminaries, as the completion of those activities is dependent upon the passing of time.