Pricing Risk Under Clause 63.6

NEC3 and NEC4 Contracts Compensation Events
1

Hi,

We are undertaking an option A NEC3 contract, whereby the Completion Date has been significantly delayed due to reasons outside of our control, although our works have been installed, and in use for some time by the end user (taken over under Clause 35).

We are obliged under the NEC3 contract to provide defect liability cover up to the Defects Date (70 weeks after Completion). Since our Plant and Materials have been installed on time, but the Defect Date has now moved considerably to the right, are we entitled to cover the risk associated with an extended defects liability period within a Compensation Event under Clause 63.6?

Many thanks for any guidance received.

2

Yes, the extra cost you incur as a consequence of the increase in risk from a later defects date can be included in the assessment of a compensaition event that extends the completion date. This is not, however, a seperate compensation event; you would have needed to make an inclusion in an existing event and, if they have all been implemented, you may have lost that opportunuty.