Frequently Asked Questions

We are the contractor on an NEC3 Engineering and Construction Short Contract (ECSC). An item on the price list is for the supply and installation of culverts. The amount of these actually required is almost double that stated on the price list, so we consider this is a compensation event. However, the guidance notes say, ‘when the compensation event only affects the quantities of work to be done under items in the Price List for which a quantity and rate are stated … the rates in the Price List are used to price the changed quantities’. The item in this case relates to materials and we are going to encounter additional costs for material delivery and also price rises in the materials if we carry out the additional work. Due to it being a rather large increase compared to the quantity stated in the price list, is there another way of assessing this compensation event so it is fair to both parties? 

The ECSC is a simple contract designed for straightforward works that pose low risks to both parties. As such the pricing document is called the price list to differentiate it and its use from a bill of quantities in other contracts.

The increased quantity will be either because the works information was changed to add more, in which case the compensation event will be under clause 60.1(1), or because the original quantity in the price list was wrong, in which case the compensation event will be under clause 60.1(13). In either case it appears the compensation event will only affect the quantities of the price list. We assume it has no other effects, for example delaying planned completion or requiring other works to be carried out, or requiring you to work under different conditions. In that case the compensation event is assessed in accordance with clause 63.1.

In this simple contract, the contractor takes the risk for any price increases. We are struggling to understand your comment about delivery costs. You allowed, or should have, in your original rates the cost for delivering these materials and therefore, if the quantity increases, you will get a pro-rata increase of that allowance.

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