Ground Conditions : Part 4 : Ground conditions under NEC Engineering and Construction Contract
11 Jul 2017
With a focus on the Engineering and Construction Contract, we consider how NEC contracts deal with ground conditions.
NEC deals with ground conditions as a Compensation Event (clause 60.1), provided the circumstances satisfy the following criteria (subject to amendments):
A: The contractor encounters physical conditions which:
- are within the site; and
- are not weather conditions.
B: Which “an experienced contractor have judged at the Sub-Contract date to have such a small chance of occurring that it would have been unreasonable for him to have allowed for them.”
C: The compensation event is only the difference between the conditions encountered and those which it would have been reasonable to allow for.
The Contractor is considered to have taken into account the Site Information, and information referred to in the Site Information (if any ambiguity the conditions more favourable to doing the work are taken into account), information available from a visual inspection and other information an experienced contractor could reasonably have been expected to have or obtain (clauses 60.2 and 60.3).
Key factors to be aware of when dealing with unforeseen physical conditions and any claim under the NEC Engineering and Construction Contract are:
Physical conditions are arguably more inclusive than ‘ground conditions’ but subject to the key exclusion of weather conditions;
What is reasonable for an experienced contractor to allow for is likely to be the subject to some discussion;
Contractors should carefully consider the Site Information and undertake a visual inspection of site and consider whether there is any further information which could and should be obtained;
All other requirements/Condition Precedents to payment for a compensation event must be satisfied i.e. Early Warning Notices, notification within 8 weeks (subject to amendment) and quotations.