5a

As the Contractor has completed the additional works and the Project Manager
accepted the quotation in accordance with clause 66.1, with the change of Prices in
accordance with clause 66.2, the assessment of an implemented compensation
event is not revised in accordance with clause 66.3. Hence, the Contractor shall be
paid 100% of the accepted quotation in normal situation.
In this case, the additional works was carried out in March instead of in expected
January. The amount of the addition works should be paid shall be considered as
below:
- In accordance with clause 61.6, if the Project Manager has previously made the
assumptions in the instruction that the additional works would be carried out in
night-time in January. The Project Manager shall notify the correction if the
additional works is in fact carried out at daytime in March. Then the Project
Manager shall notify a compensation event in accordance with clause 60.1(17) to
correct the previous assumptions stated in the instruction. Under clause 63.1, the
Project Manager shall assess the compensation event based on the actual
Defined Cost up to March plus the fee and agree the cost with the Contractor
under clause 63.2. When the additional works is completed in March, the
Contractor shall be paid the Price for Work Done to Date in accordance with
clause 11.2(29). And the Fee which is calculated by applying the fee percentage
to the amount of Defined Cost as stated in clause 11.2(10). It shall be the
approximately 60% of the accepted quotation.
- If the delay in carrying out the additional works is the fault of the Contractor and
it also delays the Completion in the Accepted Programme, and if Option X7 is
selected for the contract, the Contractor is required to pay delay damages at the
rate stated in the Contract Data under clause X7.1. If Option X7 is not
incorporated in the contract, the Contractor is required to pay the additional cost
incurred by the Client in accordance with clause 25.3.
5b
NEC ECC Option C is a target contract with an Activity Schedule. The activity schedule
is listed in Contract Data. The Prices are the lump sum prices for each of the activities
on the Activity Schedule in accordance with 11.2(32). The Prices will be adjusted to
take account of compensation event in accordance with clause 63.14 & 63.6 due to
the additional work.
Defined Cost refers to the cost of the components in the Schedule of Cost
Components less Disallowed Cost in accordance with Clause 11.2 (24). The definition
of Disallowed Cost is stated in clause 11.2(26). Under clause 52.2 the Contractor
should keep the records of accounts of payments of Defined Cost and proof that the
payments have been made. The Contractor under Clause 52.4 allows the Project
Manager to inspect for payment application assessment of the accounts and records
which it is required to keep.
However, payment to the Contractor should be based on Price for Work Done to Date
which in turn is based on Defined Cost plus Fee in accordance with 11.2(31).
Adjustment for such forecast total Defined Cost will be made later on the basis of
actual Defined Cost.
The amount due in payment for the assessment date in January will be based on a
forecast of the Defined Cost plus the Fee in January. When the works are completed
in March, for the payment assessment in March of the PWDD, the Project Manager
forecasts the actual Defined Cost, which would have been paid by the Contractor
before the next assessment date plus Fee.
If the works for a compensation event is carried out in January (with poor weather
conditions and working at night time), the Project Manager will certify payment of a
higher amount when comparing with working in March with fine weather and
daytime working as the PWDD will be based on Defined Cost. On the other hand, if
the works for this compensation event are carried out in March, the cost and the
amount of payment will be lower. The total of Defined Cost will be compared with
the total of the Prices to compute the pain/gain share pursuant to clause 54. The
pain/gain share is based on share range and share percentage stated in Contract
Data Part 1.
5c
In accordance with clause 63.1, the assessment of a compensation event is based on
the actual Defined Cost of the work done by the dividing date, the forecast Defined
Cost of the work not done by the dividing date and the resulting fee. The amount to
be paid to the Contractor will depend on when the Project Manager has given the
instruction as it determines the dividing date.
Under clause 14.3, If the Project Manager gives the instruction before carrying the
additional works, the Project Manager may notify a compensation event in
accordance with clause 61.1. The Contractor should submit a quotation to reply to
the Project Manager in accordance with clause 61.2 & 62.3. If the compensation
event has not yet been assessed, it means that the Project Manager has not replied
to the Contractor’s quotation within the time frame allowed in clause 62.3. In
accordance with clause 62.6, if the Project Manager fails to respond after two weeks
notified from the Contractor, the Contractor shall deemed that the quotation is
accepted.
If Option A is selected for the contract, the Contractor shall be paid the 100% of the
accepted quotation in accordance with clause 11.2(29). If Option C is selected for the
contract, the accepted quotation will be used to change the Prices, and the
Contractor shall be paid the actual Defined Cost plus the Fee in accordance with
clause 11.2(31).
If the Project Manager gives the instruction under clause 14.3 after the additional
works is carried out. The dividing date in clause 63.1 is the date of the instruction.
Under the same clause, the assessment of the compensation event is based on the
actual Defined Cost plus the Fee which will be paid to the Contractor no matter
Option A or Option C is incorporated in the contract.
5d
The correcting of the Defect is not a recoverable cost in Option A. As correcting a
Defect is not a compensation event under clause 60.1, the Prices are not to be
changed for correcting a Defect and the activity schedule is not revised again. In
accordance with clause 44.1 & 44.2 the Contractor shall correct a notified Defect
before the end of the defect correction period. As stated in clause 11.2 (29) the Price
for Work Done to Date is the total of the Prices for the completed activities either
they are in group or not. Therefore an activity is not completed if there is a notified
Defect on it before Completion. At the assessment date, the Contractor shall not
receive payment for that activity which already does not include any cost of
correcting the Defect.
5e
The Contractor should correct the Defect whether it is notified or not in accordance
with 11.2(2) & 44.1. The Contractor should submit a revised programme to the
Project Manager for acceptance in accordance with clause 32.1 to show the plan of
correcting the Defect.
In accordance with clause 46.1, if access is available for the Contractor to correct the
notified Defect before Completion but if the Defect are not corrected, the Project
Manager may arrange other people to correct them. The Project Manager shall
assess the costs to the Client based on the costs incurred by other people to correct
the Defects. Then, the Contractor shall pay such costs accordingly.
If access is not available for the Contractor to correct the notified Defect before

AU
Completion, the Project Manager should assess the costs of correcting the Defect
based on the cost to the Contractor of correcting the Defect in accordance with 46.2.