Back in November 2016 I posted a question on LinkedIn questioning the level of mitigation that is expected/obligated by the Contractor in assessing a CE. I am looking at producing a publication/eBook next year of which this will form a chapter (if not a book all on its own!)). I will be interested on your thoughts on this.
A link to the LinkedIn discussion is attached below.
Here is a really simple scenario of which I think the contract struggles to give a definitive answer:
The critical path on Accepted Programme goes through activities A/B/C/D/E all of which are three weeks long and shown as a finish to start relationship, planned Completion and Completion Date are both at end of week 15.
In week 3 the Employer delays access to activity B by two weeks which is agreed as being a compensation event. This would move planned Completion by two weeks and thus entitle Completion Date to move by two weeks (once CE is implemented). However, the PM states that the Contractor could do activities B and C at the same time (assuming that is possible). If the Contractor can switch the order to do C before B at no inconvenience to themselves then they should – and there would be no effect to the planned/Completion Date. What if they could do B and C at the same time, but they need increased equipment, need an extra supervisor, extra resources (as one gang was going to be used for both activities) and there is increased risk? The Contractor could price all of this within this compensation event, but the PM can make their own assessment of in particular the “perceived” increased risk. The Contractor is now committed to meeting same end date, with an increased cost that they do not agree with and a greater risk of overrunning.
Taking this to the extreme, if B was delayed by nine weeks, but in theory B/C/D/E could all be done at same time. They can, but at massive increased resources, equipment, cost and risk. Are they duty bound to do this? The risk of overrunning now is massive and will the PM ever agree the cost of extra risk the Contractor puts forward? I think the practical answer is no, but then again IF the answer to the first scenario where the Contractor is delayed by two weeks is “yes that would be reasonable/contractual” – where did it switch from becoming reasonable/contractual to unreasonable/not-contractual to mitigate?