We are a contractor using ECC option C (target contract with activity schedule). Unforeseen events on site have led to an artificially high water table, significantly higher than that detailed in the site information. We are uncertain as to whether this would fall under the compensation event description of being a physical condition or a weather condition.
Please also advise on the course of action as the current response from the project manager is rejection until further substantiation is provided. The problem is that the event is having a significant impact on the works which will need to be resolved immediately.
Our concern is that we do our best to mitigate the impact by adding additional plant, equipment and resource to deal with the event but the project manager responds in three weeks and notifies us that this is not a compensation event.
Our question is really this: does the contract prescribe that we should begin associated works on what we believe is a compensation event prior to implementation, and at our own risk of cost should it be rejected?
In answer to the first part of your question, the higher water table is clearly a physical condition. Given that it is considerably higher than that shown on the site information, this appears to be a compensation event under clause 60.1(12), given the contents of clauses 60.2 and 60.3.
However, you are in any event required to provide the works, see clauses 20.1 and 11.2(13), and deal with the high water table in doing so, whether it is a compensation event or not. And even if it is a compensation event, it will be valued assuming you acted promptly and competently to the event – see clause 63.7. You cannot therefore just wait about until the project manager decides if it is a compensation event or not, you must get on with sorting it out promptly and competently.
Of course as this is option C, all of this relates only to the total of the prices, that is the ‘target’. In the meantime you will be paid the defined cost for actually dealing with the high water table as part of the price for work done to date (see clauses 50.2, 11.2(29) and 11.2(23)) in any event, and whether or not it is a compensation event.