Frequently Asked Questions

We are a client using the NEC4 Engineering and Construction Contract (ECC). What is the most practical way to analyse a delay when looking at both a compensation event and damages over a similar time frame? If a compensation event was notified by the contractor, delaying planning completion by an amount of time, and now a separate matter has occurred which has caused a delay by the contractor and pushed planned completion further than the other compensation event did, what is the correct process to analyse to assess delays? The delay caused by the contractor looks to have also appeared around the same time it notified a compensation event on a separate matter and delay.

Generally speaking, in the ECC delays are dealt with in the order that they are known, not when they actually occur. The 2019 amendments clarified how this is done in practice.

Clause 63.5 sets out how a notified compensation event is dealt with. Events, such as other compensation events or delays at the risk of the contractor, which have already happened by the dividing date will be considered when assessing the compensation event (see the 2 bullets of clause 63.5). The dividing date for each compensation event is set out in the last two paragraphs of clause 63.1. Therefore, if this other delay had not incurred before the dividing date, it is not taken into effect when assessing the compensation event. If it had caused delay before the dividing date, the extent of the delay at that time will be taken into effect.

All of this will be done by assessing effect to the accepted programme and the logic links and float in it. For that your project manager and contractor must first run the actual effect before the dividing date, if any, of the contractor’s delay on the accepted programme. After that, the effects of the compensation event will then be fed into the revised programme. All of this will be done within the software the contractor is using for its planning and therefore whoever carries this out will need to be experienced in using the software.

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