We are the contractor under an ECC option C (target contact with activity schedule). We have submitted a number of quotations to the project manager and we have agreed to relax the response period for the project manager to accept our quotations. We have a number of occasions where the project manager is assessing compensation events at a lesser value than we have already agreed with the subcontractor. What should we do? Also, if a subcontractor’s actual defined costs is greater than how the project manager assesses our compensation event, is the difference a disallowed cost?
Answer
The first point is to question why you made such an agreement with your project manager. If it causes such problems, then insist the project manager deals with your quotations within the time scales set out in clause 62.3. If the project manager fails to do so then notify him or her of that failure under clause 62.6.
If the project manager continues to fail to reply for 2 weeks after that notification, then your original quotation will be treated as accepted (clause 62.6) and therefore implemented (clause 65.1), after which only the adjudicator can change it. The timescales in the ECC (and the NEC3 Engineering and Construction Subcontract) are deliberately written so that you should not need to get yourself in this position.
The answer to the second question is that this excess amount is not a disallowed cost, simply because it is not stated within the list of disallowed cost items stated in clause 11.2(25).
