NEC3 TSC Option A and X19 Secondary Option

NEC3 and NEC4 Contracts Secondary X, W and Y options
1

Hi,

  1. I’m working under NEC3 TSC Option A with Secondary Option X19. Inclusive of X19 is X19.10 [Compensation Events]. Does this supersede the main compensation event provisions within Option A or are these only in respect of the task orders? The reason I ask is that the Employer is not formally issuing instructions to the Contractor for discrete packages / projects of work (tantamount to Task Orders under the TSC) and there is no provision in X19 for the Contractor to notify the Employer of a CE. As a Contractor there is a lot of interface with the end user (as was historically the case prior to the new NEC TSC being used). The Service Manager is not administering the project in accordance with the Contract and is arguably taking advantage of our good relationship with the Employer.
  2. Given the heavy interface with the end user, should we be raising an early warning in the first instance and then following it up with a Clause 61.3 notice if indeed this does apply or can we jump straight into the 61.3 notice?

Kind Regards,

3 Likes
2

The compensation events listed in X19.10 are in respect of a Task Order.

Regarding the Service Manager’s administration, or lack of, I would suggest that you notify of both an early warning and a compensation event.

3

The compensation events listed in X19.10 are in respect of a Task Order.

Don’t forget clause 20.1 which states that you provide the Services outline in the Services Information. Only the Service Manager can issue an instruction changing the Service Information. All communications the contract requires have to be in writing (13.1). Your good relationship with the Employer should not make any difference - everything should be coming through the Service Manager. You should not be taking instructions verbal or otherwise direct from the Employer/end user.

Sounds like the early warning will be for the lack of administering the contract and the problems that could lead to, or that you believe the Employer wants something different than the Service Information shows. Unless you have a written instruction to do something you should not be doing it. You can only notify a compensation event under clause 61.3 if there is one i.e. one of the 14 items in clause 60.1 has occurred.