Apologies if this has been answered previously I have struggled to find it.
Contract is an NEC4 ECCS option A.
A Subcontractor delivered plant to site on Monday and used it that day to carry out scoped works. The plant was intended to be used again on Friday, with no works planned in between. However, an instruction was later issued to carry out additional CE works on Thursday.
The plant is paid for on a per-day basis, and the Subcontractor had no intention of off-hiring it during the week. Whether or not the Thursday instruction had been issued, there is no change to the subcontractor’s Defined Cost.
Given this, is the Subcontractor entitled to charge for the plant on Thursday? Otherwise, it appears the Contractor would be getting the benefit of using the plant on Thursday without paying for it. If this is the case, is a Subcontractor allowed to claim there were planned works for the plant that day—not necessarily scoped works but potentially other duties such as tidying the compound or site—in order to justify the charge?
Does this also apply to labour costs if they were always planned to be on site for the full week?
On the question of whether you could claim the Equipment (correct NEC terminology) would have been working on something on the Thursday, you can do that provided it’s the truth. Is it? But I’m not sure it matters in this case.
In Option A the value of a compensation event is the change to Defined Cost. This is (most likely) the cost of the Equipment in the published list plus or less the adjustment percentage tendered.
As such I don’t see how the change to Defined Cost can be zero, unless I’m missing something. It may well be the case that the amount the Subcontractor pays to their supplier(s) is unchanged, but that’s not relevant here.
Same logic applies to labour, but its hourly rates from the Contract Data Pt 2.
Hired plant is paid for on a weekly rate generally.
Owned plant depreciates on its hourly usage.
Plant requires fuel and an operator to put it to use.
The Subcontractor should have supplied (or be working to) a resource loaded Accepted programme. This programme would show the plan for the equipment.
Any other opinion (from the subcontractor or the PM/Contractor) on what the machine was doing is not based on facts.
In practice - the resource wont be properly shown allocated to an activity on the programme, making the assessment a bit tricky.
However, what cannot be denied, is that even if the equipment was planned to be parked up, and has now been instructed to be put to use - the Subcontractors actual cost will go up. He may not be able to demonstrate his defined cost has gone up due to the problem with the programme. However, the PM/Contractor should not have accepted a non resourced programme and shouldn’t benefit from their own error either.
A fair assessment is to pay for the fuel and driver on a defined cost basis.
Sorry, am I missing something here. Under Option A, Defined Cost is assessed using the Shorter Schedule of Cost Components with Equipment assessed using the stated published list of Equipment and the % adjustment. What and how the Subcontract pays for Euipment is therefore not relevant to assessing a compensation event. The assessment is the rate from the list adjusted by the % multiplied by the time required for the work required by the compensation event.
Fair point - I’ve got distracted by the ‘no change to the subcontractor’s Defined Cost’ statement in the original question, and took that as correct. It isn’t.
Answer amended accordingly.