NEC3 Option D - Equipment Delivery

We are a Subcontractor to a Contractor and our works is for numerous civils activities. One of these activities is to install some pipework which is free-issued by the Contractor. It is stated in the Works Information how the pipework will be delivered i.e. assembled.

The material has arrived on site dis-assembled (not per the Works Information) and requires assembly which has taken additional time.

We had notified a CEN but this was rejected by the Contractor. The Contractor referenced an email communication which alluded to this material no longer being pre-assembled. This email came from a third party and the subject was of numerous technical discussions, some not related to the assembly points.

The Contractor is claiming that at that point an EWN should have been raised so the issue could be addressed.

Our objection to this is that we as a Subcontractor are not privy to the Contractor’s arrangements with their supplier, and we have not received any indication, other than this email (very limited) which would suggest the Works Information will change. It is our view that the Contractor has not complied with the Works Information, but is attempting to blame the Subcontractor for not highlighting their non-compliance.

Who is correct with regards to this matter ?

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I believe you were right to notify a CE - I assume under cl. 60.1 (12) (physical conditions) - and the Contractor was wrong in rejecting it. If it’s stated in the Subcontract Works Information that the free-issued pipework is to be delivered pre-assembled, then it would be unreasonable for an experienced subcontractor to allow otherwise.

The Contractor’s contention regarding the early warning is something that should be dealt with at the assessment stage (cl. 63.5) and should have been notified within the instruction to submit quotations (cl. 61.5). For clarity, I’m not saying that the Contractor’s argument has merit - this would turn on the facts, some of which you have described; however, the CE should have been accepted.

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Thank you Peter, helpful contribution as always.

Can i ask, in your view, If the Contractor was aware first, and failed to notify an Early Warning which the Subcontractor later picked up, what are the repercussions to the Contractor for not notifying that Early Warning. The Subcontractor ‘punishment’ for failing to do so is set under 63.5 but where is the Contractor’s ?

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No worries at all.

You’re quite right in your argument; both Parties are obliged to notify each other as soon as they become aware, and practically only the Subcontractor is paying the price of failing to do so, either through a time-bar or by an adjusted assessment by virtue of clause 63.5.

I assume that if the Contractor indeed failed to give an early warning as soon as it became aware of a matter set out in clause 16.1, that would constitute a breach of subcontract under clause 60.1 (18) and could be notified accordingly by the Subcontractor; however, what the practical implication would be in terms of assessment of the CE is another story.

Withstanding the above, I think that the intention behind the drafting is that the payer (the Contractor in this case) should be given the opportunity to mitigate any forthcoming expense, hence the “penalising” of the Subcontractor if it fails to notify.

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