Under an ECC3 Option C, can the PM "cherry" pick activities in the accepted programme as the basis for an assessment to omit works which he considers was not undertaken to provide the WI

1 Like

The simple answer is no. Just becasue something appears on an Accepted Programme, or for that matter on an Activity Schedule does not mean that if that item is not done it is a (negative) compensation event. Equally in the same way the Contractor can not rely on being able to claim a compensation event because something was missing on an Accepted Programme or accepted Activity Schedule.

Compensation events are assessed as Defined Cost, which is the cost that the Contractor assesses (in accordance with the Contract) that it would have cost to have that element of works and its overall impact. The value of an activity schedule item is not used to assess the value, anymore than specific durations or resource levels on an Accepted Programme (although it may well be a useful starting point for an assessment).

Both the programme and the Activity Schedule are intended to demonstrate how the Contractor plans to do the work. If you planned to do a tricky bit of temporary works on the programme, but then decided that you did not need to do it that would not be a compensation event. Under option C any savings or efficiencies would be reflected in a lower forecast cost and a greater “gain share” if you are coming under the target Price and so a “win win” all round.

The Accepted Programme is not the place where the PM should be looking to to determine whether works (and note this is the permanent works - not any temporary works associated with it) were undertaken or not. It is the Works Information that needs to be inspected to ascertain whether the Contractor has complied with his obligations (see clause 20.1).

If the Contractor has not done all the work in the Works Information then the works cannot be considered complete (but do check your definition of Completion in the WI). The contract contains other remedies for these circumstances, e.g. delay damages, if you have included option X7.

Where the PM considers that parts of the works were not undertaken and the contractor has left site then then the WI would need to be amended to reflect that. In such case this would constitute a omission and any subsequent compensation event would have to assess the reduction in the scope of works.

Note however unless there are specific constrains in your WI then the Contractor is free to construct the works in whichever way he sees fit. The NEC3 ECC allows for this by regularly reviewing the programme (32.2) and also for amending the Activity Schedule (54.2) where appropriate

The assessment of such scope reduction would need to take into account all the circumstances of which the PM was aware. This would include any information from the Accepted Programme, as well as from other sources such as site records. Note though in the circumstances the PM has to act an ‘independent certifier’ (10.1) and make a fair assessment of the value of any scope reduction.