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Professional Services FAQs

Top Frequently Asked Questions

Q We are the project manager on an NEC3 Engineering and Construction Contract (ECC) Option A (priced contract with activity schedule) for a highways project. The contractor has submitted a revised programme showing that the completion date has moved some 8 days. This is due to the effect of two compensation events which have not yet been implemented − one of which is not accepted by us. We think the contractor is expecting us to accept the revised programme and subsequently try to implement the compensation events. Should we not accept the revised programme and push the contractor to submit another programme? Or should we accept the revised programme since it is realistic?
Q What does best practice cost audit methodology look like?
Q How much should I spend on cost checking in open-book contracts?
Q We are a consultant engaged under an NEC3 Professional Services Contract (PSC) Option A (priced contract with activity schedule). The employer has requested we undertake a desktop study. This is normally fine but, in this case, the scope requires us to engage a subcontractor to drill some boreholes to obtain data for the desktop study. We are concerned here because the PSC does not allow for the usual compensations events in relation to physical conditions or allow for the recovery of equipment, plant and materials. Is it possible to place an NEC3 ECS for the boreholes and recover this from the employer under a PSC? Also, how would we deal with site-related compensation events?
Q We are the contractor on an NEC3 Engineering and Construction Contract (ECC) Option C (target contract with activity schedule). All is going well but we have just been alerted by our accounts department that one of our named staff resources had an increase in salary some three months ago. This would increase the rate to the employer and result in an additional cost for hours invoiced to date for this person. The invoice for the original rate times hours worked to date has been submitted and settled. However the employer is disallowing the additional (back-dated) cost incurred due to the rate rise and will only accept the higher rate and associated invoices moving forward. Is this correct?
Q We are a subcontractor on an NEC3 Engineering and Construction Subcontract (ECS), using option B (priced contract with bill of quantities), option W2 and secondary option X16. The final project manager’s payment certificate was dated on 2 April, but we have yet to receive a defects certificate some time later, despite numerous requests. How quickly must the contractor issue us with a defects certificate? What remedies do we have to force release of the defects certificate after our polite requests have failed to elicit any action?
Q We are a client planning to let an NEC4 Design Build Operate Contract (DBO). Can the performance measurements be written to be a positive or negative adjustment on the amount due to the contractor?
Q We are the service manager on an NEC4 Professional Service Contract (PSC) option E (cost reimbursable contract). The schedule of cost components defines the cost of people and the extract from the contact in item 11 states, ‘A cost calculated by dividing the total of the following payment by the total time recorded, with the resulting amount multiplied by the time recoded for work on the contract.’ ‘Total time recorded’ is not a defined term so does total time recorded refer to billable hours, that is the total number of working hours available in a year, or all time in the year equalling billable time plus sick time plus training and holiday time?
Q What output should I expect from an audit of costs?
Q We are the project manager on an NEC3 ECC building project. The employer is using part of the building prior to completion to suit the contractor’s method of working. Do we need to issue a take-over certificate?

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