The Project Manager has been issuing recurring instructions at regular intervals to the Contractor requiring additional items to be procured (related to COVID), and until recently, each of these instructions would lead to a compensation event under clause 60.1(1), and allowing the Contractor to recover the costs of complying with the instruction.
The project has suffered several delays over the last two years, some of which are recoverable, and some are not. As a result, the planned completion date is now beyond the contract completion date (i.e. the Contractor is now late). The Project Manager has continued with the recurring instruction to procure additional items, but has stated under clause 61.4 that the Prices shall not be changed on the basis that the event arises from the fault of the Contractor. He argues that these costs are only being incurred as a result of the Contractor being on site beyond the Completion Date.
It is the Contractor’s opinion that being late does not equate to being at fault for the event, and therefore should be allowed to recover the additional costs of complying with the Project Manager’s instruction.
It is difficult to contemplate how the Contractor being late can be the root cause for the Project Manager instructing additional work. If the Project Manager has changed the Works Information/Scope then, subject to the 2 bullet points under clause 61.1(1), the matter is a compensation event that the PM should be notifying of and the Employer compensating the Contractor.
Dave, thanks for your reply. To clarify, the PM has not instructed additional works as such, but has instructed the Contractor to provide additional items related to the site set up - additional welfare & transport to allow social distancing, additional offices for their staff, increased cleaning regime etc.
His argument for not paying the ‘top-up’ beyond the Completion Date is that we have a duty to complete works by the completion date.
Our argument is that passing the Completion Date (becoming late) does not alleviate us of the ongoing responsibility of complying with his instruction, and we should therefore be paid for doing so. Further, we are not responsible for the event (Covid), so using 61.4 should not apply.
Hi Shaun, the PM’s instructions may not be physical works but they are a change to the Works Information/Scope and therefore fall under 60.1(1) so you are correct 61.4 does not apply and in any event you are not responsible for the root cause.