Competent NEC3 ECC Project Manager (PM) Part II

What makes a competent NEC3 ECC Project Manager (PM) ?

My previous post on this I talked about the PM's duty to notify compensation events that arise from PM instructions to change the Works Information.

The essence of the compensation event process is to agree change in real time, not to park the change management process until some point in the future, which was historically the typical outcome. If change is parked, exactly what is the benefit to the parties to the contract? All it brings is uncertainly for the period it remains not agreed and can likely benefit only those who derive an income from disputes, which is not the parties themselves.

So what measures does the ECC include to force the PM to play their part in the process? Well, this is dealt with in the compensation event process and, in basic terms, forces the PM to press on with the process to reach conclusion even where the Contractor does not play their part. If the PM does not do what they should be doing eg does not assess a compensation event under clause 64.1 then the Contractor can force the issue by notification of the PM's default which may lead to a deemed accepted quotation. More about deemed acceptance another time. The issue I wanted to concentrate on was default by the Contractor in the compensation event process.

Clause 61.3 offers a time bar to those compensation events notifed by the Contractor more than eight weeks of the Contractor becoming aware of the event. The exception here is those compensation events which the PM should have notified to the Contractor but did not. So, assuming we have a notified compensation event which the PM decides is not one of the 4 matters stated in clause 61.4 then the PM should notify the Contractor the event is a compensation event and instructs the Contractor to submit a quotation.

The first hurdle to get over here is the Contractor (clause 62.3) submitting a quotation within three weeks of the PM instruction to do so. If the Contractor does not submit a quotation then it falls to the PM to assess the compensation event - see first bullet of clause 64.1. The show goes on!

If the Contractor does submit a quotation within the three weeks then within two weeks of the submission the PM replies to say 'yes, accepted', 'no not accepted and please submit a revised quotation' or 'no not accepted and I will be making my own assessment'. Assuming the last outcome, then this must happen if one of the last three bullets of clause 64.1 apply - not assessed correctly, no programme/alterations submitted or latest programme not submitted.

So, assuming a compensation event is not time barred under clause 61.3, the compensation event process forces the PM to keep the process going even where the Contractor does not play their part in eg submitting quotations on time, to the detail required or not at all. The PM cannot wait for these things to happen, the PM makes these things happen with or without the assistance of the Contractor. A lesson to the Contractor therefore is for goodness sake positively play your part in the process.

Is this a sound, sensible process, or are parties better off leaving the process of assessing compensation events until some point in the future - what do you think?

Rob