Programme implications of a PMI issued as a result of late design

I represent the client on an Option C D&B contract. After submission of numerous non compliant designs for adaptation of a piece of existing plant the contractor finally submitted a compliant design over 12 months late according to the programme. As this item was not on the critical path this in itself was not an issue, however, during the investigation works for the production of the design it was identified that the item of plant requires replacement rather than adaption. It is agreed that a PMI is required to change the scope and that this variation constitutes a Compensation Event, however, due to the requirements for planning application the project as a whole will now be delayed. If the contractor had produced the design when the programme had indicated the time for the application process would be covered by the concurrent design and construction works. Now that we are at the back end of the project this item is on the critical path and will push out the planned Completion date. In this situation, as we have to issue the PMI now, do we still have to use the current Accepted Programme to assess this delay and grant an Extension of Time for the planning process when we are in this predicament due to the Contractors tardiness?

Yes, you must assess the change of the new PMI against the “last accepted programme” (Cl.32). This initially sounds like an event that neither party could reasonably foresee happening. If you believe the contractor could have “reasonably foreseen” this event then Cl.61.5 &Cl.63.5, would allow you to assess it from the point at which an experienced contractor should have notified an Early Warning. Key question here is “could an experienced contractor have foreseen this event occurring? and did they notify an EWN to the PM”? If not, then it’s an extension of time/cost to the last accepted programme (Cl.32) and Planned Completion & Completion Date move out. If the answer is “yes” they could have foreseen this event occurring and failed to notify an EWN, then the PM can assess the CE time & cost from the date the PM believes they should have notified an EWN, either way it’s like going to extend the programme.

NEC does not deal with concurrency, each event is assessed on it’s own merits.