↧
NEC ECC: The Supervisor is refusing to issue a Defects Certificate due to falling into dispute with the Employer - what can the Contractor do?
↧
Answered: NEC ECC: Physical Conditions Compensation Event and 'experienced contractor'
You are correct, but it could be influenced by the amount of pre-contract work the Contractor did. For instance, what you would expect an experienced Contractor to know could vary between :
- a Contractor who won the work as one of six tenders who had a month to bid. If the Employer (NEC3) /Client (NEC4) pointed at this clause, my response would be how come your consultant who prepared the design didn't identify it and reference if from the Site Information, (2nd bullet point)
- a Contractor under ECI who was paid for a year on a consultancy basis to work up the design with the Employer.
- a Contractor who won the work as one of six tenders who had a month to bid. If the Employer (NEC3) /Client (NEC4) pointed at this clause, my response would be how come your consultant who prepared the design didn't identify it and reference if from the Site Information, (2nd bullet point)
- a Contractor under ECI who was paid for a year on a consultancy basis to work up the design with the Employer.
↧
↧
Answered: NEC PSC: Change in skill level of a resource
Presumably, an increased level of skill resource is because the Consultant is now being instructed to do something that was not in the original Scope. I.e. there is a change in Scope which is a compensation event.
↧
Answered: Under an NEC PSC Option E do you still get paid if you go past the completion date
Yes ! No where in the contract does it say you are not (that I am aware of), so ask them to point to the close where it says this is the case.
↧
Answered: Is the project manager entitled to deduct more advance payment repayment from IPCs than what is stipulated in the contract?
Assuming you have Secondary Option X14 and the amount to be re-paid in instalments is stated in the Contract Data as $128,000 per month (assumed this is your assessment interval), then the Project Manager is obliged to deduct the amount stated. As this is information stated in the Contract Data, then it can only be changed by a Deed of Variation between the parties to the contract.
Similarly, the Project Manager could not decide, for no particular reason other than his own opinion, to increase the retention percentage from 3% to 5%, if it is stated in the Contract Data to be 3%.
Similarly, the Project Manager could not decide, for no particular reason other than his own opinion, to increase the retention percentage from 3% to 5%, if it is stated in the Contract Data to be 3%.
↧
↧
Answered: NEC ECC: Equipment costs for delay
The time effects are assessed against clause 63.3 i.e. the Accepted Programme. This provides an incentive for the Contractor to keep it up to date both to reflect progress etc. and to keep the Employer / PM up to speed about their intentions.
By implication, the change in Defined Costs is therefore calculated in part against the effect on the Accepted Programme of the compensation event.
So, without knowing further details, it comes down to what was in the Accepted Programme at the time.
By implication, the change in Defined Costs is therefore calculated in part against the effect on the Accepted Programme of the compensation event.
So, without knowing further details, it comes down to what was in the Accepted Programme at the time.
↧
PMI needed if an NCE has been accepted?
If the Works information states a constraint that the Employer will provide something at a certain rate of supply (i.e per month or per week), however the Employer then subsequently fails to provide this at the rate stipulated in the Works Information, the Contractor then raises an NCE which is accepted.
Does the Project Manager need to then issue a PMI (and accompanying NCE) to change the Works Information and correct the rate of supply at which he is now to provide? or does the fact that the Contractor has raised an NCE essentially act as recognition that the Works information has been changed and so no PMI is then required?
Does the Project Manager need to then issue a PMI (and accompanying NCE) to change the Works Information and correct the rate of supply at which he is now to provide? or does the fact that the Contractor has raised an NCE essentially act as recognition that the Works information has been changed and so no PMI is then required?
↧
NEC ECC: Delegation of project manager's duties
At the beginning of the contract the Employer's Project Manager named in the contract data delegated his duties to another person until the completion date of the project.
Is this a change in Project Managers?
Can both PMs give instructions? (If the original PM gives an instruction is this then a valid instruction?)
Is this a change in Project Managers?
Can both PMs give instructions? (If the original PM gives an instruction is this then a valid instruction?)
↧
management staff costs when assessing delays
How do you assess changes in management?
The contract has a site management team which changes during the project.
At the start ( 1xProject Manager, 1x Site Agent, 1xWorks Manager, 1xengineer) as per contract data part 2.
During the project there are a lot of delays and the original staff are not performing as anticipated and the contractor brings in additional management resources
After six months ( 3xProject Managers, 3x Site Agents, 1x Works Manager,, 2 x engineers)
Any delay costs that include the management team then increases significantly for the additional staff.
However the contractor has not submitted an early warning or notified a compensation event due to a change in price due to the extra staff.
So should the assessment be based on the original site team and what is in Contract data Part 2, until the contractor notifies that the change in the site team may increase the price, or is the fact that it has been longer than eight weeks since the change in the management team that then they are not entitled to any change in prices?
Or does the fact the EW's and PMI;s have been raised mean that any changes to the site team are included in a compensation event so should be assessed in the quotations?
The contract has a site management team which changes during the project.
At the start ( 1xProject Manager, 1x Site Agent, 1xWorks Manager, 1xengineer) as per contract data part 2.
During the project there are a lot of delays and the original staff are not performing as anticipated and the contractor brings in additional management resources
After six months ( 3xProject Managers, 3x Site Agents, 1x Works Manager,, 2 x engineers)
Any delay costs that include the management team then increases significantly for the additional staff.
However the contractor has not submitted an early warning or notified a compensation event due to a change in price due to the extra staff.
So should the assessment be based on the original site team and what is in Contract data Part 2, until the contractor notifies that the change in the site team may increase the price, or is the fact that it has been longer than eight weeks since the change in the management team that then they are not entitled to any change in prices?
Or does the fact the EW's and PMI;s have been raised mean that any changes to the site team are included in a compensation event so should be assessed in the quotations?
↧
↧
Can contractor claim for loss of profit under NEC3 Option B, if so, what's the procedure?
The priced contract value is turning out to be 50% more than the actual value. Quantities were overstated and the contractor mobilised based on false quantities.
↧
Answered: NEC ECC: Would strike action be considered as a compensation event?
As you typed 'Force Majeure Event' in capitals, I am assuming it is a Defined Term in your conditions of contract, so a corresponding definition should be provided somewhere. Depending on this definition it is likely that certain 'tests' have to be applied to determine whether the matter is a compensation event, probably in a similar vein to how prevention events are dealt with. One of the primary tests for a prevention event is whether the event stops the works from being completed (at all or) by the Completion Date.
Notwithstanding the above, clause 80 provides for Employer's risks which includes strike action but only in relation to Loss or damage to the works, Plant and Materials. Where this is the case then this would be a compensation event under clause 60.1 (14).
Notwithstanding the above, clause 80 provides for Employer's risks which includes strike action but only in relation to Loss or damage to the works, Plant and Materials. Where this is the case then this would be a compensation event under clause 60.1 (14).
↧
Answered: NEC ECC: Can the Contractor introduce new items to revised quotations?
I guess the answer is yes - assuming you agree that these costs would have been reasonable to have forecast as being necessary. You will now take these into account when you make your own assessment (assuming you don't agree in full their new revised quotation.
If a Contractor has overpriced/estimated something in a quotation then you would make your own (lower) assessment. If you can now see that they have underestimated a quotation then you should make your own (higher) assessment.
None of this is about actuals and benefit of hindsight, as 63.1 is clear that it should be a forecast of Defined Cost from the point the instruction was given or the compensation event notified.
If a Contractor has overpriced/estimated something in a quotation then you would make your own (lower) assessment. If you can now see that they have underestimated a quotation then you should make your own (higher) assessment.
None of this is about actuals and benefit of hindsight, as 63.1 is clear that it should be a forecast of Defined Cost from the point the instruction was given or the compensation event notified.
↧
NEC ECC: Management staff costs when assessing delays
How do you assess changes in management?
The contract has a site management team which changes during the project.
At the start ( 1xProject Manager, 1x Site Agent, 1xWorks Manager, 1xengineer) as per contract data part 2.
During the project there are a lot of delays and the original staff are not performing as anticipated and the Contractor brings in additional management resources
After six months ( 3xProject Managers, 3x Site Agents, 1x Works Manager,, 2 x engineers)
Any delay costs that include the management team then increases significantly for the additional staff.
However the contractor has not submitted an early warning or notified a compensation event due to a change in price due to the extra staff.
So should the assessment be based on the original site team and what is in Contract data Part 2, until the Contractor notifies that the change in the site team may increase the price, or is the fact that it has been longer than eight weeks since the change in the management team that then they are not entitled to any change in prices?
Or does the fact the EW's and PMI;s have been raised mean that any changes to the site team are included in a compensation event so should be assessed in the quotations?
The contract has a site management team which changes during the project.
At the start ( 1xProject Manager, 1x Site Agent, 1xWorks Manager, 1xengineer) as per contract data part 2.
During the project there are a lot of delays and the original staff are not performing as anticipated and the Contractor brings in additional management resources
After six months ( 3xProject Managers, 3x Site Agents, 1x Works Manager,, 2 x engineers)
Any delay costs that include the management team then increases significantly for the additional staff.
However the contractor has not submitted an early warning or notified a compensation event due to a change in price due to the extra staff.
So should the assessment be based on the original site team and what is in Contract data Part 2, until the Contractor notifies that the change in the site team may increase the price, or is the fact that it has been longer than eight weeks since the change in the management team that then they are not entitled to any change in prices?
Or does the fact the EW's and PMI;s have been raised mean that any changes to the site team are included in a compensation event so should be assessed in the quotations?
↧
↧
NEC3 ECC option E - Immediate demobilisation of resources
Our contract is an option E contract with a rates schedule. The Employer issued us a Project Manager's Communication instructing us to immediately (by the next day) demobilise 50% of the work force.
We now need to pay out the notice periods of the employees and the Employer does not accept any costs during this time. Can they do this and do I have a claim for the costs incurred to pay out the employees notice periods?
We now need to pay out the notice periods of the employees and the Employer does not accept any costs during this time. Can they do this and do I have a claim for the costs incurred to pay out the employees notice periods?
↧
Answered: NEC ECC: Management staff costs when assessing delays
First of all, can I clear up a potential area of misunderstanding which arises from your words "However the contractor has not submitted an early warning or notified a compensation event due to a change in price due to the extra staff."
i point out that :
1. for it to be a compensation event, a compensation event has to occur in the first place i.e. typically an event in clause 60.1. Bringing in extra staff is not one of the listed compensation events. Consequently, the 'Prices' will not change.
2. The Contractor is not obliged to give an early warning just because their own Defined Costs may increase.
So onto your question : under clause 63.1, you assess the change in the Prices (due to a CE) by calculating the change in Defined Costs + Fee. Not only does it sound abundantly obvious that there are additional management people on Site, but it is also hopefully recognised in the programme which is hopefully up to date and accepted as well.
Consequently, when a CE occurs and these people (and any offices etc.) are on Site longer, you calculate the change in Defined Costs + Fee that results.
i point out that :
1. for it to be a compensation event, a compensation event has to occur in the first place i.e. typically an event in clause 60.1. Bringing in extra staff is not one of the listed compensation events. Consequently, the 'Prices' will not change.
2. The Contractor is not obliged to give an early warning just because their own Defined Costs may increase.
So onto your question : under clause 63.1, you assess the change in the Prices (due to a CE) by calculating the change in Defined Costs + Fee. Not only does it sound abundantly obvious that there are additional management people on Site, but it is also hopefully recognised in the programme which is hopefully up to date and accepted as well.
Consequently, when a CE occurs and these people (and any offices etc.) are on Site longer, you calculate the change in Defined Costs + Fee that results.
↧
Answered: NEC ECC: Can contractor claim for loss of profit under Option B, if so, what's the procedure?
In response to your headline question, the answer is 'No'.
However, under clause 60.4 of option B, you can have a compensation event for reduced quantities.
While on the face of it you get paid less, in terms of rate x ORIGINAL quantities for those items over the 0.5% threshold, you get a re-rate to reflect the reduction in quantities. That 're-rate' would be more than the original rate to reflect the under-recovery of overheads under the original rate.
Having said all of this, it's not that simple as the re-rate has to take the form of a lump sum - presumably a deduction compared with a original quantity x original rate - in accordance with the last bullet point of option B clause 63.13.
However, under clause 60.4 of option B, you can have a compensation event for reduced quantities.
While on the face of it you get paid less, in terms of rate x ORIGINAL quantities for those items over the 0.5% threshold, you get a re-rate to reflect the reduction in quantities. That 're-rate' would be more than the original rate to reflect the under-recovery of overheads under the original rate.
Having said all of this, it's not that simple as the re-rate has to take the form of a lump sum - presumably a deduction compared with a original quantity x original rate - in accordance with the last bullet point of option B clause 63.13.
↧
NEC ECC: Option A - Payment for completed activity
If the duration of an activity is extended as a result of a compensation event, is payment for that activity effectively delayed until the activity is complete?
↧
↧
NEC ECC: Does a Client have to declare the price/quality award criteria at tender stage?
As the incumbent supplier of professional services to a private company who, in turn, is contracted to a Roads Authority we have been asked to tender for the renewal of our services. This happens from time to time and is quite normal in our relationship but a new parent company of our Client has introduced a new type of agreement and procurement process.
The new approach is for the tenders to be assessed on both price and quality but the Client has refused to confirm the price/quality split or how the individual scores for price and quality and the combined total score will be calculated.
If the services were being procured by a Public Contracting Authority then Directive 2014/24/EU would require the award criteria to be published during the tender period.
Is anyone one aware if there are similar rules that govern procurement by a private organisation?
The new approach is for the tenders to be assessed on both price and quality but the Client has refused to confirm the price/quality split or how the individual scores for price and quality and the combined total score will be calculated.
If the services were being procured by a Public Contracting Authority then Directive 2014/24/EU would require the award criteria to be published during the tender period.
Is anyone one aware if there are similar rules that govern procurement by a private organisation?
↧
Answered: NEC ECC: Management staff costs when assessing delays
Firstly, apologies for the long winded response, but this is not a straightforward subject !!
I am assuming that this question relates specifically to an assessment of prolongation and the associated People costs, rather than the question of PAYMENT for these resources, which is a different topic altogether, and depends upon the Main Option.
You state that PMIs have been instructed, which assumes that there have been notified compensation events. As a compensation event is not a risk that the Contractor has allowed for within his baseline programme, it will, consequently, have a disrupting influence upon the works, to a greater or lesser extent.
This disruption causes a 'resource thickening' issue whereby over time, supplementary resources are required to manage the works, although there is no delay to planned Completion, with the additional People required to deal with the consequent disrupting influences.
Clearly the cost of these additional People cannot reasonably, or contractually, be allocated to a single compensation event, so an ‘increasing’ cost assessment should be included in separate quotations to account for this. The Prices then includes allowances for an additional amount of People, beyond that at the contract date.
Where a 'resource thickening' assessment is made, it should, however, properly address the issues of; causation, remoteness, mitigation and contractual compliance, based on some considered and intelligent principles of how the amounts have been assessed. A common approach taken is a 'global claim' type assessment, which just assumes ALL additional resources are due to compensation events. Even though the calculation is a difficult one to assess, this approach is unacceptable. I note that some contracts now include a percentage addition, for this very assessment within Contract Data, to avoid the subsequent 'frank discussions' !!
This is not to say, however, that ALL of the additional resources on Site are specifically due to compensation events, although where there is a delay to planned Completion due to a compensation event, then ALL of the resources should be included in a prolongation assessment, where it is demonstrated that they are all required for activities which are critically linked to planned Completion.
Note that a quotation assessment should be based upon the following;
Total actual and forecast Defined Cost including the compensation event
less
Total actual and forecast Defined Cost NOT including the compensation event
I hope this helps.
I am assuming that this question relates specifically to an assessment of prolongation and the associated People costs, rather than the question of PAYMENT for these resources, which is a different topic altogether, and depends upon the Main Option.
You state that PMIs have been instructed, which assumes that there have been notified compensation events. As a compensation event is not a risk that the Contractor has allowed for within his baseline programme, it will, consequently, have a disrupting influence upon the works, to a greater or lesser extent.
This disruption causes a 'resource thickening' issue whereby over time, supplementary resources are required to manage the works, although there is no delay to planned Completion, with the additional People required to deal with the consequent disrupting influences.
Clearly the cost of these additional People cannot reasonably, or contractually, be allocated to a single compensation event, so an ‘increasing’ cost assessment should be included in separate quotations to account for this. The Prices then includes allowances for an additional amount of People, beyond that at the contract date.
Where a 'resource thickening' assessment is made, it should, however, properly address the issues of; causation, remoteness, mitigation and contractual compliance, based on some considered and intelligent principles of how the amounts have been assessed. A common approach taken is a 'global claim' type assessment, which just assumes ALL additional resources are due to compensation events. Even though the calculation is a difficult one to assess, this approach is unacceptable. I note that some contracts now include a percentage addition, for this very assessment within Contract Data, to avoid the subsequent 'frank discussions' !!
This is not to say, however, that ALL of the additional resources on Site are specifically due to compensation events, although where there is a delay to planned Completion due to a compensation event, then ALL of the resources should be included in a prolongation assessment, where it is demonstrated that they are all required for activities which are critically linked to planned Completion.
Note that a quotation assessment should be based upon the following;
Total actual and forecast Defined Cost including the compensation event
less
Total actual and forecast Defined Cost NOT including the compensation event
I hope this helps.
↧
NEC ECC: Cancellation of CE's
There is 3 parts to this question:
Option B Contract
1.If a CE was raised up to Part 3 being received from the Contractor, how do you cancel a CE?
2. What if the CE was notified, Part 2 was issued to the Contractor and the Contractor informs the PM that Others did the work and there will be no cost?
3. If there is a duplication of a CE but Part 2 has already been issued?
Option B Contract
1.If a CE was raised up to Part 3 being received from the Contractor, how do you cancel a CE?
2. What if the CE was notified, Part 2 was issued to the Contractor and the Contractor informs the PM that Others did the work and there will be no cost?
3. If there is a duplication of a CE but Part 2 has already been issued?
↧