Hello PP members,
I need a little bit of help with understanding how to deal with Compensation Events under the NEC3 ECC (Option B) were the PM is assessing CE's now, knowing that there will be a design change as a result of some post-award value engineering which could reduce the time required for completion.
In this scenario there are legitimate CE's with extensions of time which if implemented with change the Completion Date to approxiametly 2 months later.
However as a result of value engineering by the PM, a substantial time saving can be made by implementing a revised design that will allow a portion of the works to commence earlier than planned at the tender and award stages.
How should the PM deal with the assessment of CE's that award extension of time now, knowing that a change in the works information will lead to saving in time later.
We have debated this quite extensively within the project team and so far the options discussed are:
1. PM assesses the CE's, awards the extension of time and later requests an acceleration quote - this puts the project at risk if the Contractor then submits an unreasonable quotation which the Employer &/ PM cannot accept. (the redesign will also reduce the costs, but it is the time saving which is the main motivation to pursue the alt. design)
2. PM assesses the CE's, but includes an assumption that the later redesign will negate the extension of time and does not implement the time effects of the CE's.
3. The PM assesses the CE's, awards the extension of time now, but when later CE for redesign is implemented the resultant 'terminal float' gained will then become the PM's float (this doesn't seem contractually correct?)
Additional Notes:
- Design is being done by the Designer seperately contracted by the Employer - therefore design is the Employers
- The PM is contracted by the Employer and also serves as the Supervisor
- Guidance notes on Clause 63.3 "No Compensation Event can result in a reduction in the time for carrying out the works." this seams to clsoe the door on dealing with the redesign time savings through a later CE (?)
Any thoughts would be most welcome. Especially if you have successfully dealt with a similair scenario on previous contracts...