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Professional Services FAQs

Top Frequently Asked Questions

Q We are the project manager on an ECC Option A (priced contract with activity schedule) and secondary option X1 (price adjustment for inflation) is not included. The contractor has submitted a quotation for a compensation event which includes an amount for inflation. The compensation event is due to the employer’s delay in getting planning approval at the start of the project after contract award. Does the contractor have any entitlement to inflation if option X1 is not included? Further, can the contractor claim for staff on site when the site could not be set up due to planning and the staff working from their normal offices?
Q We are the client on an NEC3 ECC Option D contract (target contract with bill of quantities). If we amended the schedule of cost components so that the cost of the contractor’s professional staff who are working in the working areas were not part of defined cost, what effect would this make?
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 the project manager on an NEC3 Engineering and Construction Contract (ECC) Option A (priced contract with activity schedule). A contractor has submitted a first programme for acceptance but we do not believe the date for planned completion shown on this programme is realistic. We know the contractor has lost several days work due to recent high winds preventing use of a crane. We are yet to receive notification of a compensation event regarding the weather, but expect one, and the completion date currently remains unchanged.

Our understanding is that this first programme needs to show a realistic picture of the project at the time it is issued, that is reflecting the impact to planned completion due to weather, or any other delay, regardless of whether a compensation event has been implemented or not. As it stands the programme reflects the situation as if no delay has been experienced and, in our view, this is not a sound basis for the management of the contract or assessment of any compensation events. We would welcome your thoughts on this and whether we would be justified in not accepting the programme as it stands.
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 As the client, must we include a guaranteed maximum price in an NEC3 ECC Option C contract?
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?

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