An Option B ECC contract is being used to construct a new road. Secondary Options X1, X2 and X7 are included in the contract. Any response referring to dispute resolution should identify whether Option W1, W2 or W3 applies as an assumption.

TheContractorhas been on Site for 5 weeks.

a. When should the first payment be made and what happens if theContractordoes not submit an application for payment?

[5 marks]

Part of theworksincludes a lagoon to alleviate flood risk. This has been part priced as a lump sum and part as a rate. The concrete rate for the foundations is priced on a m3 rate and theProject Managerconsiders that this is overpriced compared to another project worked on recently and is arguing that it does not represent value for money for theClient.

b. How should the lump sum item be dealt with in terms of payment and can theProject Managercertify what it considers to be better value for money for the concrete?

[4 marks]

It transpires that theContractor'scosts overall are far less than the Bill of Quantities rate and lump sum, but that the bill rates for the lagoon are actually underpriced.

c. If an Option D contract had been adopted how would theProject Managerassess the amount due?

[5 marks]

The first compensation event occurs for an increased length of road. TheContractoris stating the existing rates in the Bill of Quantities should be applied and has failed to provide a quotation within the three weeks.

d. Is theContractorcorrect about the Bill of Quantities rates? How should the compensation event be assessed and what should theProject Managerdo next?

[6 marks]

TheProject Managerfails to make an assessment of the compensation event. An assessment is eventually made four months later. TheContractorhad undertaken the work within one week of the original instruction and is complaining about the impact of this late assessment on its cash flow.

e. How should this be dealt with in the next payment certificate?

[5 marks]