NEC3 TSC: Can Service Manager instruct a Task Order under X19 and make own assessment?

NEC3 and NEC4 Contracts Secondary X, W and Y options
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The Service Manager can make their own assessment of a compensation event, but can they do the same with a Task Order? If they do not agree with the quotation the Contractor has put forward for a Task Order under X19 can they instruct the Contractor to proceed anyway and make their own assessment? What clause allows them to do this?

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From your question it sounds as if both the Service Manager and Contractor agree that there are elements (which could be all) of the Task Order for which there is not an existing price in the Price List. Therefore, under the last paragraph of clause X19.3 “The Prices for items that are not in the Task price list which are not taken from the Price List are assessed in the same way as compensation events.”

Because this sentence contains the word “assessed”, I think we can definitely say that it includes the criteria for assessing the quantum as laid out in core clause 63. I am not so sure - as in I think it probably does not - includes the process and timescales of core clauses 61, 62, 64 and 65. If it does, then ultimately the Service Manager would
(a) be able to instruct the Contractor to get on and do the work and (b) notify their own assessment and impose it.

If - as I think more likely - the process is contained within clause X19, then I think the Service Manager can instruct you to do the work with the status of your quotation being part of the consultation. Here’s the logic for that view :

  • under X19.1 (1) “a Task Order is the Service Manager’s instruction to carry out a Task.”
  • under clause X19.2, the Service Manager has to CONSULT with the Contractor before issuing a Task Order;
  • under X19.2, second bullet, the contract is quite specific about how items of work with a pre-existing price in the Price List are used
  • as stated before, under clause X19.3 “The Prices for items that are not in the Task Price List which are not taken from the Price List are assessed in the same way as compensation events” BUT it does not state who not state who makes this assessment.
  • the process and time scales given in core clauses 61, 62, 64 and 65 do not really fit in with the overall process of instructing a Task Order and are far too prescriptive to satisfy the word ‘consult’. Consequently, I do not think they apply.
  • therefore the Contractor has not submitted a formal contractual quotation, but has responded to the Service Manager’s consultation under the last sentence of X19.2. Providing the Service Manager has ‘consulted’, I therefore think he can instruct the Task Order even if there are disagreements over the Price for it.

Having said this, I am quite sure that the Service Manager does have to build up the prices for the elements where there is not a price in the Price List in accordance with core clause 63 and could be challenged if you believe they have not done so.

Reachback is intended to give more definitive answers from experts than I have probably given here, so you could open this up for views on BuiltIntelligences NEC3 LinkedIn forum to see if there are opposing arguments which I have not considered.