On an ECC project, if we have had compensation events that have moved the completion date out from the original completion date and then we later omit works that cause planned completion to move back, how is this to be assessed in terms of time and money?
Answer
ECC clause 63.1 requires a forecast to be made of what effect the compensation event has on the defined cost to carry out works. If the compensation event means resources are forecast to be on site for a week longer than shown on the accepted programme, then the defined cost will increase because of that additional period and that additional defined cost will be included in the assessment of the compensation event.
Equally if an instruction is issued omitting work then this will reduce the prices – see core clause 63.2 and clause 63.10 in options A and B (priced contracts) or clause 63.11 in options C and D (target contracts). If, for example, the omission means resources are forecast to be on site for a week less than shown on the accepted programme, the defined cost will decrease because of the additional period and the decrease in defined cost will be included in assessment of the compensation event. As project manager, you would expect the rate for both plusses and minuses to be similar, other things being equal.
However, the same does not apply to the completion date, which can only be moved to a later date if a compensation event delays planned completion – see clause 63.3. If a compensation event means that planned completion is earlier than on the accepted programme, the completion date is not moved. Other than through clause 12.3, the only way the completion date can be moved to an earlier date is by agreement between the contractor and project manager – see for example clauses 36 and 44.
