Frequently Asked Questions

Under an NEC3 Engineering and Construction Contract (ECC) using Option B (priced contract with bill of quantities), our contractor is required to return to site to correct a defect after completion. The site is now operational and the contractor is required to provide an additional level of specialist supervision over and above that which was required during the works. The contractor has notified a compensation event on the basis that there has been a change to the site conditions. As the employer, my query is whether a compensation event can occur at this stage, that is after completion, if it relates to the correction of a defect?
As employer you have to provide access for the contractor to carry out the correction of a defect – see clause 43.4. However, as this clause makes clear, the works will at that stage be taken over by you and therefore the contractor will not have exclusive access and that access may well be subject to sensible restrictions. It is difficult to see how that could be called a change to ‘site conditions’, which is not a term used in the ECC. At that stage the site no longer exists because the works have been taken over.

Even if the site conditions had changed, the contractor would be faced with two insurmountable hurdles. The first is that a change to site conditions is not a listed compensation event. The second is that, even if it were, this event has arisen as a result of a fault of the contractor’s, in that the contractor has produced works that did not comply with the works information and was therefore a defect. In that case your project manager is entitled to rely upon the first bullet of clause 61.4 and state that the prices and so on are not to be changed.

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