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Subject Code : NEC4-ECC
Country : Hong Kong

Assignment Task

1. The Contractor has been appointed on an ECC Option C contract where the works are design by the Client. The Project Manager instructs the Contractor to stop work on a part of the works because the Client’s designer is considering the implications of a design change. All are keen to avoid any abortive costs if at all possible.

After due consideration, some 2 weeks later, the potential design change is abandoned and the Project Manager immediately instructs the Contractor to proceed with the original design layout, aware there may be a delay and additional costs.

a. Should the Contractor stop work on the part of the works and what should the Contractor do in order to protect its interests under the contract?

b. What sanctions are there in the contract if the Contractor does not notify an early warning in a situation where one should have been given?

c. How should the Project Manager respond?

d. The Project Manager fails to reply within 2 weeks and the Contractor notifies the Project Manager that the quotation is consequently deemed to be accepted. Is this correct?

2. A small area of paving in a recently constructed new car park has settled and is beginning to crack. This occurs before Completion of the whole of the works in an ECC Option A contract. The Client is responsible for designing the works.

a. What should the Project Manager, Supervisor and Contractor do next? What processes should be followed if it were a Defect?

b. What process should be followed if it were not a Defect?

c. What could the Project Manager do regarding the appointment of the Subcontractor?

d. How should the Project Manager respond?

3. The Contractor has been appointed on an ECC Option C contract. The tendered total of the Prices is £8.2m. Four months into the contract, the Contractor has become extremely busy and, as a result, has not submitted an application for payment by the assessment date.

a. What should the Project Manager do in the absence of an application for payment from the Contractor?

b. Should the Project Manager take account of the application for payment? How should the shortfall in the amount due be dealt with and what are the implications?

c. What are the powers of audit that can be exercised by the Project Manager? How should the above items be dealt with?

d. How are these two issues dealt with in the contract and how will they affect the amount due?

e. Is there any guarantee of the share to the Client? How are costs forecast during the contract? When and how is the Contractor’s share calculated?

4. You are the Project Manager involved in a complex refurbishment of an historic building. This has been procured under Option A of the ECC. Secondary Option X7 delay damages is included. A first programme was identified in Contract Data. The project includes extensive work by other specialist contractors employed by the Client.

a. Describe how the contract recognises such specialists that are directly engaged by the Client? What obligations are placed on the Contractor to liaise and incorporate the specialists’ work into their own plans?

b. What should the Contractor do as soon as becoming aware of this? Is there a time limit for this?

c. Should the Project Manager accept the programme? When should delay damages be deducted? Can they be increased to account for the potential additional costs of the events company?

d. How are these additional works assessed in terms of their impact on the programme?

e. If the Client had decided not to undertake these two additional items of work at the current time, what provisions are contained in the contract to assess the programme impact prior to being committed? Could additional work be instruction after Completion – what are the potential disadvantages of this?

5. A problem has occurred on an ECC Option C contract for a sports stadium. You are the Project Manager. The Scope stated that all works are to be designed by the Contractor except the steelwork, which will be designed by the Client. An argument has started over the detailed steelwork fixing drawings. The Contractor believes that these should be prepared by the Client. The Client states that these are always designed by the Contractor. The team have reached a deadlock.

a. How should the Project Manager deal with this? Who is contractually responsible for producing the detailed steelwork fixing drawings?

b. What process should the Project Manager instigate in order to resolve this? The Client wants the automatic system – who should pay for this? How does this scenario affect the Prices and Defined Cost?

c. What should the Project Manager do to arrange for the Contractor to do this? How would the Contractor be reimbursed for the cost it incurs?

d. How does the contract deal with this and what should be paid in respect of the planner’s work?

e. What does the contract state about such a scenario? Is the Project Manager able to change Contract Data? How might this be resolved and how should this be recorded?

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  • Posted on : January 20th, 2024

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