The Contractor submitted an EWN stating that they had been requested (not instructed) not to issue a design pending the outcome of a meeting.
The PM responded to the EWN with a comment to hold on submission of the design report until instructed.
The PM gave the formal instruction to proceed a month later without notifying that it was a compensation event therefore negating the time bar on the contractor becoming aware of the event.
The design report was submitted a week after the instruction.
The contractor has subsequently submitted a notification of CE stating the original reponse date of the EWN as the point at which the delay began.
I would argue that, although the contractor should have been notified at the time of the EWN, the contractor should have been aware of the event at that point and submitted a notification within 8 weeks.
A number of points :
if I was the Contractor, I would have early warned when they did, but then required a Project Manager’s instruction not to proceed with issuing the design as planned. This would have quite definitely been a compensation event. The wording that you have used - “The PM responded to the EWN with a comment to hold on submission of the design report until instructed” - is too vague for me to comment accurately on the contractual status of this communication. What form was that comment delivered ? What was the exact wording ? e.g. could it be construed as an instruction to stop work etc. If an instruction was not forthcoming, in order to protect myself, as a Contractor I would have proceeded as planned.
The 8 week time bar does not apply if the Project Manager gives an instruction. which he or she eventually did. Equally, from what you say, the Contractor’s submission was a month + a week after the originally planned submission, which is less that 8 weeks.
As a comment (reading between the lines correctly or otherwise), it sounds as if the PM is trying to have his cake and eat it - not giving positive instructions but vague wishy washy ones and then trying to time bar the Contractor from all entitlement. Faced with a PM like this, as a Contractor, I would start skipping early warning notification - a positive project management tool - and instead notify them as compensation events etc. all in order to protect my contractual position. Is this the behaviour wanted ? Does this lead to successful projects ?