You need to apply the rules of 63.1. It is forecast Defined Cost from the point either the instruction was given in writing, or for all other events when the compensation events was notified. Actual defined cost only comes into play if there has been cost incurred before this "switch point" (which is given the name "dividing date" in NEC4).
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Answered: NEC ECC: Project Managers Assessment of a CE is clearly at odds with clause 63.1 provisions, what is the Contractors remedy?
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Answered: NEC ECS: 10 % fee on dayworks labour
Couple of points here:
- no such thing as day rates under NEC. If you have pre-agreed set rates for people cost and this is intended to replace the section 1 of the schedule of cost components than that is the rates you should use. However, it should have been made clear at tender stage what these rules are.
- fee percentages are then applied in accordance with the rules of the contract. Sub-subcontract fee applies to any sub-subcontracted elements, and everything else would attract the direct fee percentage.
- no such thing as day rates under NEC. If you have pre-agreed set rates for people cost and this is intended to replace the section 1 of the schedule of cost components than that is the rates you should use. However, it should have been made clear at tender stage what these rules are.
- fee percentages are then applied in accordance with the rules of the contract. Sub-subcontract fee applies to any sub-subcontracted elements, and everything else would attract the direct fee percentage.
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Answered: NEC ECS: When does incidental works become non-incidental?
You need to apply the wording of the contract to get the correct answer here. There is no such thing as "incidental" and "non-incidental". You price the works at tender stage, and then anything that was not in the scope or anything that happens is not your risk is then able to be claimed as a compensation event. You then need to follow the rules of the contract as to how to assess a compensation event - in terms of quotation and assessment.
Very important as well you keep an up to date Accepted Programme during the life of the project so you can assess/demonstrate entitlement for each and every event.
Very important as well you keep an up to date Accepted Programme during the life of the project so you can assess/demonstrate entitlement for each and every event.
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Answered: NEC ECS: Fuel charges within a CE that were stated verbally.
More fundamental point is that there is no such thing as a verbal instruction, and no such thing as a CVI. If the Contractor is asking them to do something that is different to the Works Information then they should instruct the Subcontractor in writing. If they don't do this - then don't do the work. Clause 20.1 obligates you to do the work in accordance with the Works Information - so to do anything else could result in a defect. l
So you should have an instruction as to what the Contractor wants (or wanted) you to do, you should notify this is a CE (if they don't) and then you can claim anything the Shorter Schedule of Cost Components says you can claim for.
So you should have an instruction as to what the Contractor wants (or wanted) you to do, you should notify this is a CE (if they don't) and then you can claim anything the Shorter Schedule of Cost Components says you can claim for.
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Answered: NEC ECS: Compensation Event for not being able to complete works?
Did the Subcontractor have an instruction to not finish the gullies? If you did then you can notify that this is a compensation event and any costs associated can be evaluated through the compensation event quotation process. If you didn't have an instruction and you chose to do this off your own back then however much in good faith you did this you do not have a contractual remedy.
In any situation, your only means of recovery for anything not in the tender Price is if you can get them to agree a reason for a compensation event, and follow on with quotation and assessment to get it implemented.
In any situation, your only means of recovery for anything not in the tender Price is if you can get them to agree a reason for a compensation event, and follow on with quotation and assessment to get it implemented.
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NEC ECS: Delay to programme works under Option B
Schedule 8 of the Subcontractors contract NEC 3 Option B contained a high-level 12 month program for works which was different to the program issued at tender stage to which the subcontractors construction methodology was based.
The site access date in schedule 4 part one of the contract was 03.07.18 and based on this information the subcontractor mobilized their site management & offices to site on 25.06.18, (pre-start meeting required subcontractor to call off materials in sufficient time)
The subcontractor submitted their first 8 week lookahead program showing the sequence of works commencing from 16.07.18 and were informed by Contractor that no access areas were available and agreed that the subcontractor would work on "daywork" basis until work areas became available.
The subcontractor submitted their second 8 week lookahead program showing the sequence of works commencing .1.08.18 to which again no access areas were made available by the Contractor.
The subcontractor submitted a third 8 week lookahead program showing works commencing 16.08.18 and again were denied access to working areas by the Contractor.
This has been a recurring theme throughout the project where the client has continually denied access to working areas through no fault of the subcontractor,(noting the contractor did not reply to the subcontractors program until 10 weeks after submission)
The contractor notified the subcontractor through a CCM on 26.11.18 that pursuant to clause 32.2 of the subcontract agreement, the contractor notifies his instruction to the subcontractor to submit a fully revised main Subcontractor program to the contractor for acceptance in accordance with Clause 32.1 / the contractor believes the subcontractors plans shown on the previous programs submitted to be not practicable as the program shows continuity (refer to schedule 8)
On the 09.01.19 the contractor issued another CCM in reply to the subcontractors request for extension of time issued through clauses 61 & 63.3,
The contractor states that no quotations have been submitted by the subcontractor with regards the extension of time however they acknowledged and agreed that several of these cannot be assessed until the contractor provides revised access dates.
Which clause should the Subcontractor use as a cost recovery exercise for the documented delays above,
NOTE: The contractor has issued revised access dates on 25.01.19 (the first since the contract commenced)
The site access date in schedule 4 part one of the contract was 03.07.18 and based on this information the subcontractor mobilized their site management & offices to site on 25.06.18, (pre-start meeting required subcontractor to call off materials in sufficient time)
The subcontractor submitted their first 8 week lookahead program showing the sequence of works commencing from 16.07.18 and were informed by Contractor that no access areas were available and agreed that the subcontractor would work on "daywork" basis until work areas became available.
The subcontractor submitted their second 8 week lookahead program showing the sequence of works commencing .1.08.18 to which again no access areas were made available by the Contractor.
The subcontractor submitted a third 8 week lookahead program showing works commencing 16.08.18 and again were denied access to working areas by the Contractor.
This has been a recurring theme throughout the project where the client has continually denied access to working areas through no fault of the subcontractor,(noting the contractor did not reply to the subcontractors program until 10 weeks after submission)
The contractor notified the subcontractor through a CCM on 26.11.18 that pursuant to clause 32.2 of the subcontract agreement, the contractor notifies his instruction to the subcontractor to submit a fully revised main Subcontractor program to the contractor for acceptance in accordance with Clause 32.1 / the contractor believes the subcontractors plans shown on the previous programs submitted to be not practicable as the program shows continuity (refer to schedule 8)
On the 09.01.19 the contractor issued another CCM in reply to the subcontractors request for extension of time issued through clauses 61 & 63.3,
The contractor states that no quotations have been submitted by the subcontractor with regards the extension of time however they acknowledged and agreed that several of these cannot be assessed until the contractor provides revised access dates.
Which clause should the Subcontractor use as a cost recovery exercise for the documented delays above,
NOTE: The contractor has issued revised access dates on 25.01.19 (the first since the contract commenced)
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Answered: NEC ECS: Deduction for breaks?
The answer depends upon how the resources are actually paid, including whether they are on an hourly or daily rate or whether they are employees of the Subcontractor.
It looks like the CE is being assessed on a 'daywork' basis, which is fine if that is what has been agreed, but providing that method reasonably assesses the entire scope of the CE, including any ancillary tasks and consequential effects.
If the resources are employees then you will assess an annual 'cost to employ', in accordance with the SSCC then divide by the number of working days, to give a daily rate.
You could then divide this to give an hourly rate, but only where the total number of hours comes back to a whole day. For instance if you divide by 10 and by deducting a lunch break you are reimbursed a total of 9 hours for that day then it is not a true 'cost' of that person's time.
It looks like the CE is being assessed on a 'daywork' basis, which is fine if that is what has been agreed, but providing that method reasonably assesses the entire scope of the CE, including any ancillary tasks and consequential effects.
If the resources are employees then you will assess an annual 'cost to employ', in accordance with the SSCC then divide by the number of working days, to give a daily rate.
You could then divide this to give an hourly rate, but only where the total number of hours comes back to a whole day. For instance if you divide by 10 and by deducting a lunch break you are reimbursed a total of 9 hours for that day then it is not a true 'cost' of that person's time.
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Answered: NEC ECS: Can transport be claimed for in a CE?
Under the Shorter Schedule of Cost Components both People and Equipment (transport) are applicable costs when they are within the Working Areas, so this would be the first question to consider.
You would also need to consider the access and movement arrangements within the Working Areas to decide whether this is appropriate. Some Sites cover a large distance with imposed restrictions on movement, possibly for security or safety reasons. For instance the car park may be at a main entrance point with people moved in and out of the Site by minibus. The welfare facilities may also be some distance from the actual working areas, requiring some form of transportation to and from.
Is this a reasonable cost incurred in order to Provide the Subcontract Works? Is this how the Subcontractor is providing the Subcontract scope? (non CE works). If the answer is 'yes' then it should be included.
You would also need to consider the access and movement arrangements within the Working Areas to decide whether this is appropriate. Some Sites cover a large distance with imposed restrictions on movement, possibly for security or safety reasons. For instance the car park may be at a main entrance point with people moved in and out of the Site by minibus. The welfare facilities may also be some distance from the actual working areas, requiring some form of transportation to and from.
Is this a reasonable cost incurred in order to Provide the Subcontract Works? Is this how the Subcontractor is providing the Subcontract scope? (non CE works). If the answer is 'yes' then it should be included.
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NEC ECS: Error in BOQ and MoM description
The BoQ for an NEC3 ECC Option B contract for reinforced concrete works has an item for 20no reinforcement couplers, which the Subcontractor has priced. The method of measurement (MCHW May 2009) actually includes 'mechanical fixings' (ie couplers) as an item coverage for 'reinforcement'. Therefore this is an issue that cl 60.6 should address as it is a departure from the rules for items descriptions and there should never have been a separate line for couplers.
As well as that issue, the actual number of couplers was far higher (a few hundred). There were also couplers used on another structure, but none of these were included in the BoQ.
My interpretation of how to deal with it is that we instruct via cl17.1/60.6 correcting the BOQ which will remove the 'rogue' description, and cl 60.7 says that the subcontractor has assumed the BoQ is correct and therefore we still pay for the 20no couplers but no more, ie their quotation is zero value. Cl 60.7 doesn't give them license to claim that they didn't include for 'mechanical fixings' in the rest of their reinforcement rates does it?
We interpret that the Subcontractor has included for 'mechanical connections' within their rate, as per the MoM, which covers the couplers they have installed.
Is this correct? The subcontractor is saying that they 'didn't include mechanical fixings in their rate' (although there are no exclusions in their contract) and therefore should be paid for all of the couplers via re-measure (for those in the BOQ) and CE for those that weren't included..
As well as that issue, the actual number of couplers was far higher (a few hundred). There were also couplers used on another structure, but none of these were included in the BoQ.
My interpretation of how to deal with it is that we instruct via cl17.1/60.6 correcting the BOQ which will remove the 'rogue' description, and cl 60.7 says that the subcontractor has assumed the BoQ is correct and therefore we still pay for the 20no couplers but no more, ie their quotation is zero value. Cl 60.7 doesn't give them license to claim that they didn't include for 'mechanical fixings' in the rest of their reinforcement rates does it?
We interpret that the Subcontractor has included for 'mechanical connections' within their rate, as per the MoM, which covers the couplers they have installed.
Is this correct? The subcontractor is saying that they 'didn't include mechanical fixings in their rate' (although there are no exclusions in their contract) and therefore should be paid for all of the couplers via re-measure (for those in the BOQ) and CE for those that weren't included..
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FIDIC: Admeasurement Contract Risks in FIDIC MDB 2010
FIDIC MDB 2010 - For Works Designed by Employer and Constructed by Contractor
Re-measurable / Admeasurement Type of Contract
1) If the quantities increase (reference is Tender BOQ) during the execution of project, does this can be claimed for EOT?
2) For items, shown in Drawing but missed in Tender BOQ - Can contractor claim for variation during the execution of works?
3) Does the rate changes for any boq item, if the quantity is more than 25% of Tender BOQ?
4) Who is responsible if all the items in the Tender drawings are not reflected or missed by the Employer in the Tender BOQ?
Re-measurable / Admeasurement Type of Contract
1) If the quantities increase (reference is Tender BOQ) during the execution of project, does this can be claimed for EOT?
2) For items, shown in Drawing but missed in Tender BOQ - Can contractor claim for variation during the execution of works?
3) Does the rate changes for any boq item, if the quantity is more than 25% of Tender BOQ?
4) Who is responsible if all the items in the Tender drawings are not reflected or missed by the Employer in the Tender BOQ?
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Answered: NEC ECS: Carrying out Works While in Disagreement
It looks like you have answered your own question.
The Contractor gives an instruction under clause 17.1, which the Subcontractor is obliged to obey, in accordance with the obligation under clause 27.3.
If the Subcontractor still believes this is outside the Scope then the matter should be referred as a dispute, although probably better to sit down together firstly and for the Subcontractor to explain why they believe the work is not included in the Scope.
The Contractor gives an instruction under clause 17.1, which the Subcontractor is obliged to obey, in accordance with the obligation under clause 27.3.
If the Subcontractor still believes this is outside the Scope then the matter should be referred as a dispute, although probably better to sit down together firstly and for the Subcontractor to explain why they believe the work is not included in the Scope.
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Answered: NEC ECC: If the Employer instructs a stop work Cl.33.1
Under NEC3 PSC this would be a compensation event under 60.1 (4) provided that the instruction wasn't required due to the fault of the Consultant. The Employer should notify the matter as a compensation event at the time that the instruction under clause 33.1 is given.
It is advisable with any such instruction that the Employer discusses the intention with the Consultant beforehand. This will ensure that the Services are stopped at a convenient point and that any necessary procedures can be implemented.
The Employer should also state an assumption about how long the Services are to be stopped for, which is used in the quotation assessment. Should the actual time period of suspension be different, then this would be a further compensation event under 60.1 (9).
It is advisable with any such instruction that the Employer discusses the intention with the Consultant beforehand. This will ensure that the Services are stopped at a convenient point and that any necessary procedures can be implemented.
The Employer should also state an assumption about how long the Services are to be stopped for, which is used in the quotation assessment. Should the actual time period of suspension be different, then this would be a further compensation event under 60.1 (9).
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Answered: NEC4 PSS - Subcontract Data - why no Site Information?
The Professional Services Contracts have been designed for use with all professional services, whether construction related or not, so it would not always be applicable to have Site Information or its equivalent.
Having said that, I do appreciate where you are coming from and in developing contracts for repeat order clients, my templates have an 'Existing Information' entry as standard.
Having said that, I do appreciate where you are coming from and in developing contracts for repeat order clients, my templates have an 'Existing Information' entry as standard.
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Answered: NEC ECC: Option A - Design in Compensation Events
The answer would depend on whether the designer is a Subcontractor or not.
If 'No', then 2. above applies.
If 'Yes', then 3. above applies.
If 'No', then 2. above applies.
If 'Yes', then 3. above applies.
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Answered: NEC ECC: Contractor proposed alternative material
I endorse Glenn's comments. You could talk to them under clause 44.
i.e. we accept that it is not in accordance with the Works Information and therefore a Defect. Would you accept a reduction in the Prices ? Negotiate and then make a formal offer as per clause 44.
i.e. we accept that it is not in accordance with the Works Information and therefore a Defect. Would you accept a reduction in the Prices ? Negotiate and then make a formal offer as per clause 44.
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Answered: NEC ECS: Delay to programme works under Option B
Not sure why you were only submitting an "eight week look ahead" programme. Contract requires a "full" programme which would be issued shortly after contract award (within the period stated in CD1). Once you have a first Accepted Programme, then you have to submit regular revised (full) programmes at the interval stated in CD1 which is normally every four weeks or every month. If you have been denied access then that would be a compensation event which you should notify, and once agreed it is one submit a quote showing the cost and the time effects against the Accepted Programme. Any further lack of access or any other compensation events should then be assessed on their own merits and any further impact captured against the Accepted Programmme.
Sounds like neither Party has done what they should have done here and you have little choice but to go back in time and demonstrate this process retrospectively but in accordance with the rules of the contract.
There is no such thing as an "extension of time claim" under NEC contracts - they have to be captured specifically against individual compensation event(s).
Sounds like neither Party has done what they should have done here and you have little choice but to go back in time and demonstrate this process retrospectively but in accordance with the rules of the contract.
There is no such thing as an "extension of time claim" under NEC contracts - they have to be captured specifically against individual compensation event(s).
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Answered: NEC ECC: With X3 presumably retention, like the Fee, is deducted in Sterling?
A good question.
Assuming the currency of the contract is in 'pounds sterling', then that woul be what is used to price the Activity Schedule, with the Prices being the sum total of all the activities.
The Price for Work Done to Date (PWDD) is the total of the Prices for each completed activity (or group), which is what the retention calculation in Option X16 uses.
Option X3 is essentially used where the Employer (Client) takes the risk for currency fluctuations for the items stated in Contract Data Part 1, up to a maximum amount, where they are paid for in another currency as calculated in accordance with the stated exchange rate.
These items, however, would be priced in pounds sterling within the Activity Schedule, presumably with tendered prices converted using the exchange rate stated in the Contract Data for option X3.
Consequently, as a retention calculation uses PWDD, which relates to the Activity Schedule as priced in pounds sterling, any payment under option X3 would not fall under the definition of PWDD and would, therefore, not affect any retention calculation under option X16.
Assuming the currency of the contract is in 'pounds sterling', then that woul be what is used to price the Activity Schedule, with the Prices being the sum total of all the activities.
The Price for Work Done to Date (PWDD) is the total of the Prices for each completed activity (or group), which is what the retention calculation in Option X16 uses.
Option X3 is essentially used where the Employer (Client) takes the risk for currency fluctuations for the items stated in Contract Data Part 1, up to a maximum amount, where they are paid for in another currency as calculated in accordance with the stated exchange rate.
These items, however, would be priced in pounds sterling within the Activity Schedule, presumably with tendered prices converted using the exchange rate stated in the Contract Data for option X3.
Consequently, as a retention calculation uses PWDD, which relates to the Activity Schedule as priced in pounds sterling, any payment under option X3 would not fall under the definition of PWDD and would, therefore, not affect any retention calculation under option X16.
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Answered: NEC ECC: BREXIT (X2)
Sorry I must have missed this - is something happening with Europe????
I have just sent Theresa an early warning to say that this could cause some issues and just waiting for her to confirm a day/time for the early warning meeting but she said she was a bit busy at moment.
I don't think that Brexit itself (if it happens as you say) itself will be a CE. However, individual changes in law/legislation that affect the project would and they will be assessed on their own merits as and when.
As an aside - i saw this week my first Z clause where a client had actually introduced an extra reason for a CE in 60.1 as being the potential departure from the EU as a compensation event.
I have just sent Theresa an early warning to say that this could cause some issues and just waiting for her to confirm a day/time for the early warning meeting but she said she was a bit busy at moment.
I don't think that Brexit itself (if it happens as you say) itself will be a CE. However, individual changes in law/legislation that affect the project would and they will be assessed on their own merits as and when.
As an aside - i saw this week my first Z clause where a client had actually introduced an extra reason for a CE in 60.1 as being the potential departure from the EU as a compensation event.
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Answered: NEC ECC: Where are the prelims?
When you are tendering for either option A or B (or C or D for that matter) any prelim type costs should be included within your total of the Prices. Therefore under option A or B if it is not a line item (and often it is not) you need to distribute your prelim costs against the existing activities (no rules here other than you want the cost sensibly distributed so not adversely front loaded) so that when you add them all up that is the Prices that you intended to put forward as your tender price.
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Answered: NEC ECS: Error in BOQ and MoM description
I believe you are taking a reasonable approach, the only question I would ask is whether the drawings and/or rebar schedules detailed the couplers. If so then the Subcontractor had the information to be able to price.
The wider question it raises is if the MoM does not prescribe couplers to be separately itemised then how do you measure them since there will be no measurement rules!
The wider question it raises is if the MoM does not prescribe couplers to be separately itemised then how do you measure them since there will be no measurement rules!
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