Frequently Asked Questions

We are a contractor currently carrying out a resurfacing contract for our client using NEC4 Engineering and Construction Contract (ECC) Option C (target contract with activity schedule). The supervisor noticed water seeping from one of the utility covers so he decided to call the local authority’s drainage department, which came out to investigate. Once investigated, the drainage department established there was a blockage, removed the blockage and carried out a closed-circuit television scan to ensure it was all fine. We then received an early warning stating what had been done and that the costs were to be added to the price for work done to date, although we had no knowledge, input or a chance to rectify this and we do not know if the root cause was from our activities. Is the project manager allowed to instruct a third party to come to site without engaging with us as contractor, and then send an early warning after completion of the issue for us to pay for?
It is not an early warning, it is a late one. Early warnings are about future risks, that is they are about matters which could adversely affect costs, time or quality (see the wording of clause 15.1). The notice given is about something that has already done so.

The drain unblocking was organised and presumably paid for by the client and is therefore not defined cost, because it is not a cost that has been incurred by you, see clause 11.2(24) and the wording of the schedule of cost components. Defined cost is cost that you have incurred, not the client. The project manager can arrange for works like this to be carried out by others, but the costs of that do not form part of defined cost or the price for work done to date. In addition, if those works delayed or disrupted your work, that would be a compensation event under clause 60.1(5).

The only way you could be responsible for paying for these works, such that the costs formed part of the price for work done to date, is if the project manager (not supervisor) had instructed you to arrange and pay for them with the drainage department. But that instruction would be a change to the scope and therefore a compensation event under clause 60.1(1), and that in turn would increase the total of the prices. The costs for it incurred by you, plus the fee, would then be included in the price for work done to date. Therefore, it will have no effect on the calculation for the share.

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