Reversed Site Instruction

NEC3 and NEC4 Contracts Compensation Events
1

I’m currently engaged in an NEC 3 contract under option A. We accrued storage charges due to significant on-site delays. Initially, the project manager approved these charges and issued a site instruction to cover the costs caused by the delays. However, when we submitted our payment application, we received only 25% of the amount, as they were awaiting a review of our quotation. Surprisingly, they never followed through with the payment and didn’t review it in subsequent payment applications.

Fast forward four months, and we’ve been notified that we’re now responsible for these costs, and they’ve reclaimed the money. Consequently, we are left with these additional expenses. This situation doesn’t seem fair. Is it possible for a site instruction to be rescinded in this manner? It appears that we have no say in this matter. What are the alternatives we can explore?

2

There is no such thing as a site instruction in NEC. If a Project Manager’s Instruction was issued, which changed the Works Information to include a requirement for the Contractor to store materials, then such instruction cannot be ‘rescinded’. It would be possible for the PM to issue a further instruction to remove such a requirement from the WI, but then both instructions are changes to the WI and thereby constitute Compensation Events under Clause 60.1(1).

There is a need to do what it says in the contract.

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