Frequently Asked Questions

We are the contractor on an NEC4 Engineering and Construction Contract (ECC). We were instructed to provide a quotation for a small change to the scope, for which work had already been completed in just a day. The quotation was for a very small amount, comprising the subcontractor cost and our cost for supervising the work on site. Given there was no impact on the critical path and no disruption, the project manager’s view is that there has been no change to the prices and that, therefore, the quotation should be zero. Is this fair?

The project manager is not correct. Just because the date for planned completion has not been delayed, that does not mean you have not incurred additional defined cost carrying out extra direct works and subcontracted works. Those defined costs form the basis of valuing the compensation event, see clause 63.1.

Additional resources from both you and your subcontractor were needed to carry out the additional works. In addition, people and equipment, again from you and the subcontractor, were needed to stay on site longer than they would have if the compensation event did not happen. These works do not construct themselves, so the costs should be included in the assessment for the compensation event.

Most smaller compensation events do not affect the critical path. That does not stop the additional defined cost being incurred and included in the assessment of those compensation events.

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