Could you please clarify the position in ECC in relation to the timing of the execution of instructed works? We note the guidance notes on clause 63.1 that assessment for compensation event assessments will usually be forecasts of the cost of works yet to be done. But does the contract have any teeth in terms of forcing the contractor to carry out instructed work immediately, or allow the contractor to wait for acceptance of a quotation or project manger’s assessment prior to carrying out additional works? In considering this, can you comment on clause 61.1 where the contractor puts the instruction into effect and clause 65.1 dealing with when a compensation event is implemented?
Answer
Implementing a compensation event has nothing to do with carrying out additional works; it merely finalises the effect upon the prices and the completion date.
Clause 14.3 allows the project manager to instruct a change to the works information, clause 27.3 requires the contractor to obey such instruction and clause 61.1 requires the contractor to put such instruction into effect immediately.
Further, clause 63.7 requires that compensation events are assessed assuming that the contractor acts promptly and competently.
The contractor cannot wait around until the compensation event has been agreed or assessed. The contract requires that the contractor get on with it, whether that means putting the instruction into effect of dealing with the compensation event if it si one that does not arise from an instruction. If the contractor fails to do so, the compensation event will be assessed assuming that it did – and the contractor may not recover all the time and money that was down to its failure to act.
