Frequently Asked Questions

We a contractor using the NEC3 Engineering and Construction Subcontract (ECS) with main option A (priced contract with activity schedule). If we instruct our subcontractor not to supply and install various new water services (i.e. it removes work scope which changes the subcontract works information), how does this manifest itself into a quotation from the subcontractor or an assessment from us? Our activity schedule shows rates and quantities. We would also like to know how the resulting residual sums become price for work done to date.
There should be no rates or quantities in an activity schedule. Instead it is, as the names implies, a series of activities with a lump-sum price for each, see clause 11.2(30). Your subcontractor gets paid for each activity once it is completed, see clause 11.2(27). There is no method of measuring the works or accommodating what is effectively a bill of quantities in ECS option A. If you wanted to use a bill of quantities, you should have chosen ECS option B (priced contract with bill of quantities). As with any instruction to change the subcontract works information, this will be a compensation event and will be assessed in accordance with the rules set out in clause 63.1. The change of the prices will be assessed as the effect the compensation event has upon the forecast defined cost of the work not yet done, plus the fee. Unless you and your subcontractor agree otherwise, the prices in the activity schedule are not used to assess the compensation event. So, the assessment uses the forecast defined cost of the omitted work, including any cost savings for being on site for a shorted period if applicable, but taking into account any costs which have already been expended, such as costs of plant and materials already ordered. To this is added the fee. The prices of the activities that have been omitted, and will never be paid for, are then deducted from this figure. If the difference is negative, then a minus figure is included in the activity schedule for the compensation event. If it is positive, a plus figure is included in the activity schedule for this compensation event. At the same time, the activities that have been omitted are removed from the activity schedule.

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