Due to the recent weather events and the forecast of continuing poor weather over the coming week to 10 days, the contractor has suggested to us as project manager that it should demobilise from site rather than sitting and doing nothing. How should we deal with this and what are the key considerations?
Answer
Ultimately, it is the contractor that has to decide how best to deal with this situation, although it is absolutely right that the contractor involves you in the discussions. By all means say that that seems a good idea if you think it is, but obviously refrain from instructing the contractor to do it.
The weather event itself may or may not end up being a compensation event. This depends whether the snow (or temperatures below zero) in the month (assuming these are stated weather measurements) meets the requirements of clause 60.1 (13). I would encourage the contractor to get the information on this as soon as possible to determine whether in fact a compensation event has occurred or not. If it has, then the time bar limitations of clause 61.3 should be noted. Of course, the sooner you can deal with it and know where you are going.
The financial risk of the event depends upon which main option you have. With option A and B it remains with the contractor unless it is a compensation event, in which case anything in excess of the 1-in-10-year return average becomes the employer’s financial risk. With option C and D it is a shared financial risk up to the 1-in-10-year return average, after which, as with option A and B, it becomes the employer’s financial risk. But whoever’s risk it is, it is in everybody’s best interests to try to resolve it as economically as possible.
