This is NEC4 (Engineering and Construction Contract), please show the clause number in the answer. Thank you!

Q

You are asked to step in as theProject Managerto manage an ECC Option A contract to construct a new retail store in its final 4 months. Thedefect correction periodis 2 weeks. The project has been under way for 18 months and, following an initial review of the paperwork and procedures, it is evident that both the previousProject Managerand currentContractorhave failed to manage the contract correctly. Any response referring to dispute resolution should identify whether Option W1, W2 or W3 applies as an assumption.

There are a number of Defects on the project which is nearing Completion. TheClientis keen to get the store open and is prepared to accept some of the Defects.

a. What provisions exist within the contract for a Defect to be accepted? How is this dealt with financially and who is then liable for work if the Defect is accepted?

[3 marks]

You meet theContractorfor the first time who explains they were unhappy with the previousProject Manager. A compensation event quotation was submitted for 420,000, but the previousProject Managerdid not accept this and then assessed it for 40,000. Upon review you believe that this is clearly wrong and should be more like 400,000. TheContractoris threatening adjudication.

b. How might this be resolved without the need for adjudication and who is able to make such an agreement? Assuming that the compensation event is subsequently changed to 400,000 by agreement of the Parties, how is the shortfall in payment dealt with?

[4 marks]

TheContractor'smost recent programme shows planned Completion after the Completion Date. Delay damages of 50,000 per day are included in the contract.

c. Assuming theContractoris late by 8 days, at what time are the damages retained? What discretion does theProject Managerhave?

[5 marks]

TheContractoreventually achieves Completion.

d. What duties should theProject Managerfulfil at Completion? What documentation should be produced and who should it be sent to?

[5 marks]

After Completion, it becomes apparent that a lift installed by theContractorhas a maximum load capacity of 8 people, but the Scope required a lift with a maximum load capacity of 10 people.

e. How should this be dealt with? What happens if this is not resolved by theContractor? Assuming there is no retention, how would this issue be dealt with financially?

[8 marks]