Join us for our latest masterclass on compensation event notifications and how to get the most out of FastDraft when managing compensation events.
What’s it about?
Learn about common pitfalls with compensation event process, gain a unique insight into the compensation event process and learn how to help your team understand and perform better. We will also tackle common misconceptions for project teams when raising and responding to CE notices, quotes and assessment.
Steven Evans and Chris Corr will be sharing their wealth of knowledge on NEC and a good dose of war stories from the good, the bad and the ugly compensation events. This webinar will also showcase our cloud-based contract management platform and its key functionality.
What you’ll learn
After attending this webinar you will:-
- Know how to avoid common pitfalls with compensation events
- Be able to flag some of the quirks of NEC compensation event clauses and
- Be able to use features within FastDraft to help keep on top of your Compensation Events
Hosts: @stevencevans, @chriscorr
Date: 22nd September 9:00 BST
REGISTER HERE
2 Likes
Question from @stevencevans “NEC Compensation Events process doesn’t allow the Completion Date to be brought forward unless its an agreed acceleration quote, but can a Key Date be made earlier via the Compensation Events process?”
1 Like
Clause 63.5 - covers this off and its broadly the same as the Completion Date “its assessed as the length of time a Key date will be met is later than the date shown on the Accepted Programme.”
1 Like
Question from Catherine Senior - if Contractor makes errors in their quotation is that not grounds for PM to make assessment?
1 Like
Short answer yes under NEC4 ECC 64.1, as the PM assesses a CE if they decide the Contractor has not assessed the CE quote correctly (second bullet points. Worth noting if the quote has been accepted it cannot be reopened.
1 Like
How is it possible that Main Contractors are able to make their own assessments of a Subcontractors submitted quotation, thus reducing the value, even when the Subcontractor has provided a quantified breakdown and third party costs ‘proving’ the validity of the sums included? @stevencevans
if an alternate quotation is instructed by the Client and not approved, will the cost related to the preparation of this offer, can it be considered as CE? @stevencevans
Should an updated programme be provided with EVERY Compensation Event, or can the relevant Compensation Events be reflected on the next issued Programme. @stevencevans
Clause 64.1 (Bullet point 2) - ‘If the Project Manager decides that the Contractor has not assessed the Compensation Event correctly in a quotation and he does not instruct the Contractor to submit a revised quotation’ does the PM not need to demonstrate the CE is incorrect. What prevents the PM from making their own assessment for every CE, on the basis they disagree with the value and/or rates? @stevencevans
Contracts will need to have a procedure where a quotation for a change is brought to a conclusion. In this case, it would either be by a final assessment by the Contractor or the Subcontractor. The NEC subcontract chooses the Contractor to make that assessment. The Contractor is motivated to get it right as the Subcontractor can start the dispute resolution process if the Subcontractor does not agree with the assessment.
1 Like
Yes, it would be, whether that error makes the quotation too small or too large. The PM does not need another other reason than the quotation has not been prepared in accordance with the contract, i.e. the PM disagrees with it.
No, the compensation event is only for a proposed instruction which is not instructed
Clause 62.2 says that ‘if the programme for the remaining work is altered by the compensation event, the Contractor includes the alterations to the Accepted Programme in the quotation’.
The alterations need to be included in the quote - whether that is done by submitting a revised programme with the quote or simply by listing the alterations is up to the Contractor, provided that what is included satisfies the requirements of the clause
1 Like
Whenever the PM has to make an assessment of a CE, it must be done within the strict timescales of the Contract and, if not, the Contractor can enact the process the ends with the Contractor’s quotation being deemed to be accepted. So what stops the PM from making the assessments for every CE is the increasing workload of taking on that task. In addition, if the Contractor disagrees with the PM’s assessment, then it can be taken to the dispute resolution process, the first step of which being a meeting of the Senior Representatives. This will involve the Client who may ask the PM why they are assessing all the compensation events.
1 Like