Frequently Asked Questions

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?
In the PSC, the employer cannot instruct you to carry out services that have no relationship at all to the original services they described. So, if there was no mention of drilling boreholes in your existing scope, the employer cannot add that because it is entirely different to that which you contracted for. Of course you can agree to do this, but that should be done in such a way as to protect yourselves. There are alternative ways to deal with this.

The usual way is to explain to your client that drilling boreholes is not part of the professional services you carry out and are certainly not part of a desktop study. You can then explain that they, the employer, must place a contract with specialist contractors for the boreholes to be drilled and the samples taken and, once you receive the information, then you can carry out the study.
Alternatively, you can explain to the employer that you and it can change the contract and add the cost of carrying out the work to the list of expenses in the contract data. That will then enable you to recover the costs of the study no matter what it costs, see clause 50.3 of the contract. Any such change to the contract must comply with clause 12.3.

Finally, with an option A contract, you can price the item in the activity schedule based upon a price you get from a subcontractor and, once it is carried out, you will be paid that price by the employer, see 50.3 and 11.2(15). There will therefore only be a risk if a compensation event occurs. You should therefore make an allowance in your price for such a risk, as you are entitled to make allowances for risks which have a significant chance of occurring. When the employer sees the price it will pay for you taking that risk, it may opt for one of the alternatives above.

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