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Your search has returned 49 FAQs

Time barring
Under ECC2 was the contractor time-barred under clause 61.3 if it failed to notify a compensation event within two weeks? Has the situation changed under ECC3 other than the period for notification having been changed from two to eight weeks?
Paying for correcting defects

The Guidance Notes for ECC3 clause 11.2 (25) on page 61 state that the correction of defects before completion is only intended to be a disallowed cost if the defect is caused by the contractor not complying with a constraint on how it is to do the work, for example a prescribed method of working or a constraint on timing of the work. I understand this would mean the contractor's costs of rectifying defects before completion are included in the defined cost, providing any constraints have been observed. Under option C, these costs would be shared between contractor and employer under the pain/gain share arrangement in clause 53.
  However, the concept that the contractor (and subcontractors) should effectively be reimbursed, even partly, for defective work would appear to be inherently unfair and inequitable. Please could you confirm that this is indeed the correct interpretation of clause 11.2 (25).

 

Weather
On the evening of 5 July last year, 48.8 mm of rain fell which caused damage to completed works. The overall rainfall that fell during July was 92 mm. According to the Met Office, the 1-in-10 year value for precipitation during July is 96.1 mm and the 1-in-10 year value for the wettest day is 30.2mm. It is accepted that the monthly precipitation experienced of 92 mm is below the 1-in-10 year average, however the rainfall on 5 July of 48.8 mm is substantially higher than the 1-in-10 year average. The question is therefore, does the weather event of 5 July, when substantially more rain fell in one day than the 1-in-10 year average for one day, constitute a compensation event under the contract?’.
The conditions of contract are the ECC3 option C and the relevant clause is clause 60.1(13), unamended. Within the contract data part 1 the weather measurements to be recorded for each calendar month are the cumulative rainfall and the number of days with rainfall more than 5 mm.
Completion of Short Contract price list
What prices are inserted on the NEC3 Engineering and Construction Short Contract (ECSC) price list – is it the tender summary breakdown for the main works or a schedule of rates?
Damages between contracts
On a current project where the main contract is NEC3 ECC option D, a subcontract has been let under the NEC3 Engineering and Construction Subcontract (ECS) option A. The main contract has delay damages of £1,000 a day, but the subcontract has delay damages of £3,000 a day which allows for additional main contractor preliminary items in the event of an overrun. If the subcontractor overruns, the damages would be applied which would in effect reduce the amount paid and therefore reduce the main contractor’s cost to the employer. 

 The consequence is that this would carry forward to the pain/gain mechanism, giving the employer a share of such reduction. If the employer then applied its own damages under the main contract, it would be receiving a duplication in benefit on delay damages, that is a share of those levied on the subcontractor and its own damages. Can you please clarify the procedure in dealing with these damages?
Salvageable items
Please can you confirm if any clauses exist to claim monies back for salvageable items found during the contract. We have a head contract between us and our client using the NEC3 ECC option A. In turn we have a subcontract using the NEC3 ECS option B.
Refusing subcontractors
Under ECC3 option A (priced contract with activity schedule), can the employer refuse to accept the contractor's supplier on the grounds of previous bad experience, even if the contractor can demonstrate that the supplier’s proposals are in accordance with the works information?
Defective topsoil?

I am the project manager on a road scheme using ECC3 option C (target contract with activity schedule). Completion was issued on 4 June and the employer took over the works on 11 June. However, a few days later, due to the heavy rain, topsoil was washed off an area of the embankment slope which also took with it landscape planting. The contractor states the scheme is handed over. We state it is a defect as the topsoil layer should not have failed.

 

Value engineering
I am currently administering a design-and-build contract under ECC3 option C (target contract with activity schedule). In January it became apparent that the target cost was likely to be exceeded and we issued correspondence to the project manager proposing ways in which to reduce the defined cost under clause 63.11. It was two months before the letter was ever referred to formally by the project manager (discussions had rejected proposals verbally) and this confirmed that the main proposal we were pursuing was unacceptable. Since then, the project manager has reviewed his position and accepted this main proposal; however, he has made a negative assessment against our compensation event figures. Our argument is that this is not a negative compensation event due to the fact that it was our proposal, but also because it was never formally notified, either in response to our original letter or indeed under separate cover. Can the project manager make his own assessment in these circumstances?
Share percentages
For an ECC3 target-cost project, please can you provide some guide to what we ought to set as our share ranges and contractor's share percentages?
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