What does NEC4 clause 60.1(12) mean?
It makes physical conditions on the Site a compensation event where an experienced contractor would have judged them too unlikely to allow for at the Contract Date.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
It is the unforeseen ground conditions event, though it is not limited to ground. The conditions must be physical, such as ground, obstructions, contamination or the state of an existing structure. They must be within the Site as the Contract Data defines it. And they must not be weather, which has its own event at clause 60.1(13). The experienced contractor test does not ask whether you foresaw the conditions. It asks whether an experienced contractor would have judged them so unlikely that allowing for them was unreasonable. That judgement is made at the Contract Date, the date the contract was made. It looks at the Site Information, the Site and its surroundings, and what a visual inspection would show. Whether the event qualifies is decided under clause 61.4, which on a subcontract means by your main contractor. Notify under clause 61.3 within 8 weeks of becoming aware of the conditions. Give an early warning under clause 15.1 as soon as you suspect them. If it is decided an experienced contractor could have warned and you did not, clauses 61.5 and 63 require the event to be assessed as if you had. The change to the Prices, your contract price, is assessed under clause 63.1. It is the effect on actual Defined Cost up to the notification and forecast Defined Cost after it, plus the Fee. Two things go wrong most. You notify the cost rather than the condition, weeks after the excavator found it. Or you cannot show what you allowed for at tender. Any delay to the Completion Date is assessed separately under clause 63, and that is a job for your planner.
Example
Illustrative example. The scenario and figures are invented.
The facts
A basement subcontractor digging a lift pit finds an unrecorded brick culvert across the pit. The borehole logs, desk study and utility searches in the Site Information did not show it at that level.
What happens
- The subcontractor stops, gives an early warning the same day, and notifies the event under clause 61.3 within the week.
- The culvert is photographed and surveyed before it is broken out.
- It is accepted that an experienced contractor would not have allowed for it.
- The quotation assesses breaking out 35 cubic metres of brickwork and diverting the water at £17,300. It adds £2,800 for the rig and crew standing while the diversion was designed, under clause 63.1.
- The Fee is added at the Contract Data percentage, with a stated risk allowance for the length of culvert still hidden beyond the pit.
The change in Defined Cost
| Item | Amount |
|---|---|
| Breaking out, removal and water diversion | £17,300 |
| Rig and crew standing | £2,800 |
| Change in Defined Cost | £20,100 |
The outcome
The change in Defined Cost is £20,100, with the Fee added and the hidden length of culvert carried as a stated risk allowance.
To have a refused event tested against the clause it falls under and pressed to implementation, see our Compensation Event Claim service.