Adoption of the New Engineering Contract Third Edition (NEC3) on Crossrail means situations will arise over an employer risk item or where the project manager will issue instructions to change the scope of the works. By Charles Wilsoncroft
These compensation events (CE) allow the contractor to be compensated for time and cost for matters outside its control, but strict timescales apply.
The contractor has eight weeks from becoming aware of an event that will give rise to a CE to notify the project manager. The project manager then has set periods with which to issue a response.
Two significant factors need to be taken into account. First, timescales and methodology should be used for CE ranging from £1 to £1,000,000 and above.
The second is the high administration input required. This is more prominent with the use of either target cost options due to the accounting and validation requirements.
The advantages that can be seen directly from properly using the NEC3 include:
- Lack of disputes at the end of the scheme
- Early resolution of final account
- Good forecasting/budgeting for scheme duration
- Effective risk management
The adoption and delivery of the NEC3 contract on Crossrail can only help to successfully complete the largest single infrastructure scheme in the country.
Charles Wilsoncroft is a consultant with Knowles, a Hill International Company