NEC3 TSC, Option A, X19 - Redundancy payments following completion of a task order

Hi, I’m working client side on a TSC, Option A with X19 task orders. A task order for the provision of building security) that has been running for 8 years has recently ended. The contractor has submitted a compensation event to cover the costs of making their personnel redundant.

I can’t seem to find any guidance on whether this cost is allowed or not? Clause X19.10 (1) states that a CE will arise if the Task Order is changed, which I have interpreted as being different to Task Order completed.

Any assistance and guidance would be most welcome!

Whilst this seems like a peculiar way to procure a security service technically there is nothing to prevent it. TSCs are rarely left unamended by the Employer and there is usually a plethora of Z clauses that completely change how the contract operates and the risk profile. In your case much will depend on the wording of the 8 year old Task Order - what Task was the Contractor instructed to do? If it was as simple as provide building security for the next 8 years then it would be difficult to see how the Contractor is entitled to a CE for merely completing the Task. If however things are less than clear on this front (and they usually are) then that might open the door for a CE. If the Contractor thinks they are entitled to a CE they have to identify which CE it is from either clause X19.10 or clause 60.1?

I wonder why the provision of security was not instructed by the SM under clause 14.3 and added to the Service Information? In your case if it had been there would be no question that it would be a CE when removed from the contract and that the Contractor would be able to recover the redundancy cost. I doubt this was in the SM’s contemplation when deciding to issue the Task Order - an unintended consequence no doubt.