Q4.
An Option C ECC contract is being used on the construction of a tidal
barrier including secondary Options X2, X6, X7 and X20. Any response
referring to dispute resolution should identify whether Option W1, W2 or
W3 applies as an assumption.
The tidal barrier is being designed by the Client.
The Contractor encounters much worse physical conditions on Site than
those envisaged by the estimators at tender. Based on the information
contained in the Site Information the Contractor considers that it would
have been unreasonable to have allowed for this and that this is therefore
a compensation event.
a. What should the Contractor do in this instance and is there a
time limit?
[4 marks]
Some time later, the Project Manager fails to respond to a different
notified compensation event. The Contractor realises this two weeks after
it notified the event.
b. What options are available to the Contractor and what happens
if the Project Manager still fails to respond?
[6 marks]
The Project Manager finally responds agreeing that this is a compensation
event. The quotation is provided by the Contractor and this is accepted in
full by the Project Manager. When the Contractor undertakes the work, it
transpires that a subcontract quote was omitted from the quotation and
from the programme assessment. As a result, the compensation event will
cause the Contractor to lose money as it stands and the work will affect
planned Completion. The Project Manager realises that the compensation
event quotation contained these errors.
c. Can the Project Manager re-assess the compensation event?
[4 marks]
The Client wants to get a price for some work before being committed.
Dependent upon the cost, the additional work may or may not be
instructed.
d. What provisions exist in the contract to obtain a quotation
before committing to the work itself?
[5 marks]
Part way through the project the Project Manager instructs a major change
to the Scope. This is very complex and there are a lot of unknown ground
conditions on this particular part of the Site. There are design options
within the change that have not been finalised. The Client, however, still
wants to obtain a quotation for this work which needs to start straight
away.
e. How should the Project Manager proceed and how may the risk
to the Contractor be limited?
[6 marks]
