NEC4: Maintaining Terminal Float while CE delay is being assessed

The Contractor has submitted a CE programme showing a delay to planned completion, which maintains terminal float and extends the Contract completion date.

While the CE is being assessed, the Project Manager states that the CL32 programme should reduce the terminal float to align with the current contract completion (1 day terminal float rather than 4 weeks). When the CE is assessed for the delay, the PM states terminal float would be added back in to the next periods CL32 programme.

Is this the correct approach and is there any liability to the Contractor of temporarily removing the terminal float? For example if this was removed and another CE event occurs, that CE programme would not show any terminal float as its the most recent accepted and reduce any further delay to the Client and add risk of delay damages to the Contractor?

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Terminal Float is owned by the Contractor. It cannot be used to mitigate the effect of a compensation event.
Therefore, there is no requirement to reduce it for CE. It only reduces where the Contractor consumes it for its own delays.
If you to remove the terminal float in the Cl32 programme and it becomes accepted you are in trouble. The effect of the CE will be measured by the effect of the CE on planned completion, which you have already moved closed to the completion date by reducing terminal float.
This is a particularly sneaky tactic by the PM. Do not fall for it.

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Greg,
The PM may have a point here.

Terminal float is the difference between planned completion and the completion date.

From what I gather, you have issued a compensation event quotation with associated programme, and have assessed the delay based on the movement in planned completion i.e. you have maintained terminal float, as you say.

It seems like separately you have issued a Cl32 programme and also maintained that terminal float (you mention 4 weeks) - to do this you would need to change the completion date shown on your programme, presumably by linking this to your planned completion date.

The completion date can only (with minimal exceptions) be changed by implemented CEs.

If the completion date that you have shown on your Cl32 programme is not your current completion date i.e. the completion date stated in your contract data amended for implemented CEs, then the PM is correct to ask you to change this. If you have linked the completion date on your Cl32 programme to your planned completion date with the 4 week lag (to maintain your terminal float) the completion date won’t be correct (unless the CE noted above has been implemented).

On your final point, compensation event assessments are based on the movement/change in planned completion, so if the Cl32 is accepted the completion date itself is irrelevant as it will have no effect on the assesment of any future CEs.

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