Is compensation event a defined term?
A compensation event is a term used in NEC contracts to mean an event which can affect the cost to the Client of the work being carried out, the time when the works will be completed, or both. A compensation event is the only way in which these can be changed.
Is acceleration a compensation event?
A. It is not a compensation event. Clause 60.1(9) relates to the withholding of acceptance for a reason not stated in the contract.
What is the period for reply NEC?
If there is no agreement otherwise, you must reply to the contractor within one week.
What is an early warning notice?
The early warning process is a risk management tool that requires the project manager and contractor to give an early warning of risk by notifying the other party before it materialises.
How are compensation events assessed?
The assessment of compensation events is based upon the event’s effect on the Defined Cost. The principle behind this is that a contractor should not unfairly gain or lose as a result of the compensation event.
Can compensation events be notified after completion?
The Project Manager or the Contractor may not issue notice of a compensation event after the Defects Certificate has been issued.
Are contract compensation events the same as relief events?
Compensation Events differ from Relief Events in once crucial respect, which drives all other differences between the two regimes: Compensation Events are (at least as between the Authority and the Contractor) within the Authority’s control and risk.
Can an early warning serve as a compensation event notice?
But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.
Can a compensation event be notified without an early warning?
The early warning clause is explicit that an early warning does not have to be notified if the matter has already been notified as a compensation event. The other key link between early warning and compensation events is the clear commercial incentive for the contractor to give the early warning.
What is the longest period that a contractor should go between formal submissions of his programme for acceptance?
Under clause 31.3 of the NEC Contract, it is then for the Project Manager to either accept a Programme or not within 2 weeks of submission.
Can a early warning be a compensation event?
The difference. One distinction between an early warning and a compensation event is that typically the early warning process deals with events that have not yet happened but have a strong possibility of occurring, whereas the compensation event process is usually for events that have already occurred.
How do you implement a compensation event?
A compensation event becomes ‘implemented’ when: The Project Manager accepts the Contractor’s quotation; The Project Manager notifies the Contractor of his assessment; The Contractor’s quotation is treated as having been accepted by the Project Manager.
How long has a Contractor got to notify the Project Manager of a compensation event?
within eight weeks
For all others, the Contractor notifies the Project Manager of the compensation event, which notice must be issued within eight weeks of the Contractor becoming aware of the event (clause 61.3). For compensation events that should be notified by the Project Manager, the 8-week time bar does not apply.
What is a compensation event notification?
Notification of a compensation event
Compensation events are events which, if they occur, and do not arise from the Contractor’s fault, entitle the Contractor to be compensated for any effect the event has on the Prices and the Completion Date or a Key Date.
What are contract Relief events?
‘Relief Events are events which prevent performance by the Contractor of its obligations at any time, in respect of which the Contractor bears the financial risk in terms of increased costs and reduced revenue but for which it is given relief from termination for failure to provide the full Service. ‘
What is the difference between early warning and compensation event?
The difference
One distinction between an early warning and a compensation event is that typically the early warning process deals with events that have not yet happened but have a strong possibility of occurring, whereas the compensation event process is usually for events that have already occurred.
What is the longest time that in theory it could take for Contractor who has become aware of what they believe to be a compensation event for that event to be implemented?
The deadline to notify is 8 weeks from the Contractor becoming aware that the event has happened.
How long does a Project Manager have to accept a programme?
within 2 weeks
Under clause 31.3 of the NEC Contract, it is then for the Project Manager to either accept a Programme or not within 2 weeks of submission. Where the Project Manager decides not to accept the programme, he must notify the Contractor with reasons why.
Do key dates have to be used in ECC?
Key dates are covered in ECC Clause 31.2 – Programme Requirements. The key dates provision is applicable when the Employer requires specific milestones or conditions to be completed or met by a certain date.
How long does the Contractor have to submit a quotation for a compensation event?
three weeks
The contractor’s obligation to submit a compensation event quotation and details of the assessment is stated in clause 62.2. The time allowed for submission is three weeks following instruction by the project manager (clause 62.3).
Are contract compensation events same as relief events?
What does indexation mean in a contract?
A procedure whereby a long-term contract for the provision of goods or services includes a periodic adjustment to the prices paid for the goods or services based on the increase or decrease in the level of a nominated price index. The purpose of indexation is to take inflationary risk out of the contract.
How long has a contractor got to notify the Project Manager of a compensation event?
How long does the Project Manager have to accept a programme under an ECC contract?
within two weeks
Under clause 31.3 the Project Manager has to accept or not accept a programme within two weeks of submission.
On what grounds can a Project Manager reject a programme submitted for acceptance by a contractor?
It does not show the information which the Contract required. It does not represent the Contractor’s plans realistically, or. It does not comply with the Works Information.