NEC3 ECC Introductory Training

Transcription

1 NEC3 ECC Introductory Training John Rayner House Keeping and Safety Fire Alarm Toilets Mobile phones Please remember to switch all mobile phones to silent 1

2 Introductions John Rayner Name: NEC3 Knowledge: Content General Overview & principles Payment Early warnings and compensation events Roles and responsibilities, Defects and the programme 2

3 Perceptions. Contractual negative, aggressive, claim conscious transparent positive, collaborative, pro-active contractual = transparent = less disputes = more satisfactory result Objectives of the NEC Clarity Stimulus to good management Flexibility 3

4 Clarity Stimulus to good management Objectives of the NEC written in straight forward plain language - avoids legal phrases and as far as possible Clarity subjective terms no long sentences uses bullet points no cross referencing between the clauses process driven, with flow charts available to demonstrate the process and ensure that there are no open ends Flexibility series of defined terms identified within the contract contract specific items kept separate in Contract Data Flexibility Stimulus to good management Objectives of the NEC used across the whole of the construction industry Clarity flexible design allocation responsibility used across a range of contract strategies allows a series of bolt on optional clauses to allow the contract to be tailored to meet the requirements of a specific project Flexibility used internationally as well as domestically 4

5 Stimulus to good management Stimulus to good management Objectives of the NEC clauses/processes intended to help the management of the project, not hinder Clarity obligates actions, and within period stated or within period of reply identifies risk early when effects can be best managed assessments of compensation events based on predicted not retrospective effect. Flexibility programme revised and accepted forms integral part of the contract Overview of the NEC3 - Principles Clause 10.1 The Employer, the Contractor, the Project Manager and the Supervisor shall act as stated in this contract and in a spirit of mutual trust and co-operation. 5

6 Overview of the NEC3 The Suite Engineering and Construction Contract Engineering and Construction Sub-contract Engineering and Construction Short Contract Engineering and Construction Short Sub-Contract Professional Services Contract Professional Services Short Contract Adjudicator s Contract Term Service Contract Term Service Short Contract Framework Contract Supply Contract Short Supply Contract ECC General Structure and Form The Core Clauses Main Option Clauses Secondary Option Clauses Contract Data Parts 1 & 2 Schedule of Cost Components Works Information Site Information 6

7 Contract Format Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Contract Data Part 1 Contract Data Part 2 Schedule of Cost Components Works Information Site Information Core Clauses Core Clauses Contract Data Part 1 Contract Data Part 2 Arranged in a structure that helps gain familiarity Clearly defined sections Limited cross referencing Written in ordinary language Flow chart basis led to simplified structure Are not altered by the Works Site Options, Information merely Information added to with unique numbering Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Schedule of Cost Components 7

8 Core Clauses Core Clauses 1 General 2 The Contractor s main responsibilities 3 Time 4 Testing and Defects 5 Payment 6 Compensation Events 7 Title 8 Risks and Insurance 9 Termination Main Option Clauses Contract Data Part 1 Main Option Clauses Contract Data Part 2 Option A: Priced contract with Activity Schedule Core Clauses Option B: Priced contract with Bill of Quantities Main Option Clauses Option C: Target contract with Activity Schedule Secondary Option Clauses Option D: Target contract with Bill of Quantities Y (UK) Option Clauses Option E: Cost reimbursable contract Schedule of Cost Components Works Information Site Information Option F: Management contract Option W1 or W2 Dispute Resolution 8

9 Employer increasing financial risk Main Option Risk Balance F Management contract Target Price with Activity Schedule E C Cost reimbursable D B Target Price with Bill of Quantities Bill of Quantities A Activity Schedule Contractor increasing financial risk Secondary Option Clauses Secondary Option Clauses Contract Data Part 1 Contract Data Part 2 X1 Price adjustment for inflation X2 Changes in Law X3 Multiple currencies X4 Parent Company Guarantee X5 Sectional Completion X6 Bonus Works for early Site completion Information Information X7 Delay damages Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Schedule of Cost Components 9

10 Secondary Option Clauses Secondary Option Clauses X12 Partnering X13 Performance bond X14 Advanced payment to the Contractor X15 Limitation of the contractor s liability for his design to reasonable skill and care Secondary Option Clauses Secondary Option Clauses X16 Retention X17 Low performance damages X18 Limitation of liability X20 Key Performance Indicators (not used with X12) Option Z additional conditions of contract 10

11 Y(UK) Option Clauses Contract Data Part 1 Option Y(UK) Clauses Contract Data Part 2 Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Schedule of Cost Components Y(UK)1 Project bank account Y(UK)2 Housing Grants, Construction and Regeneration Act 1996 / Local Democracy, Economic Development and Construction Act 2009 Works Information Site Information Y(UK)3 The Contracts (Rights of Third Parties) Act 1999 Contract Data Part 1 Contract Data Part 1 Contract Data Part 1 Contract Data Part 2 Employer s Information Core Clauses Key roles (E, PM, S) Boundaries of the site Period for reply Time scales, Defects, payment Compensation Events and risk Option clause requirements Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Key date Schedule Sectional of completion Works Site Cost Contractor s Information share Information Components Retention percentage Option Z 11

12 Contract Data Part 2 Contract Data Part 2 Contract Data Part 1 Contractor s Information Core Clauses Key people Matters to be included in the risk register Main Option Clauses WI for Contractor s design First programme Secondary Data Option for Clauses the Main Option Data for the schedule of cost components Y (UK) Option Equipment Clauses rates Working Area Overheads Defined Cost rates and percentages for design and manufacture and Schedule of Contract fabricationworks Site Cost Data Part 2 Information Information Components People percentage Published list of Equipment and percentage adjustment Schedule of Cost Components Schedule of Cost Components Contract Data Part 1 People Equipment Plant and materials Charges Contract Data Part 2 Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Manufacture and fabrication Design Insurance Schedule of Cost Components Works Information Site Information 12

13 Works Information Works Information Contract Data Part 1 Contract Data Part 2 Specifies Core Clausesand describes the works Main Option Clauses States any constraints on how Secondary Option Clauses the Contractor Provides the Works Y (UK) Option Clauses Documents are referenced in the Contract Data Schedule of Cost Components Works Information Given in an instruction Site Information Site Information Schedule of Cost Components Contract Data Part 1 Contract Data Part 2 Describes Core Clausesthe Site and its surroundings Main Option Clauses Referenced in the Contract Data Secondary Option Clauses SI reports and test results Physical condition reports Y (UK) Option Clauses References to available information Statutory undertakers Schedule of Cost Components H&S Files Works Information Site Information Contains only factual information 13

14 Exercise The NEC3 uses the Contract Data to define the full terms and conditions. The pro-foma entry is: The conditions of contract are the core clauses and the clauses for main Option...., dispute resolution Option... and secondary Options... of the NEC3 Engineering and Construction Contract April Write out the definition of the conditions of contract selecting the right options to ensure that the commercial requirements are met. Break 14

15 Employer increasing financial risk Payment Options (Main Options A F) Payment provisions are stated in main options A to F Each options varies the financial risk Payment depends on the definition of Price for Work Done to Date Option A A Activity Schedule Contractor increasing financial risk 15

16 Employer increasing financial risk Main Option A Priced Contract with Activity Schedule Activity Schedule does not have to describe all the work Paid only on Completing each activity Shorter Schedule of Cost Components or agreed rates and prices No recovery for the costs of preparing compensation events Option B B Bill of Quantities A Activity Schedule Contractor increasing financial risk 16

17 Employer increasing financial risk Main Option B Priced contract with bill of quantities Use chosen method of measurement BoQ corrected and new rates used/agreed Payment on a remeasure basis Final BoQ a complete description of the works No recovery for the costs of preparing compensation events Options C & D Target Price with Activity Schedule C D B Target Price with Bill of Quantities Bill of Quantities A Activity Schedule Contractor increasing financial risk 17

18 Main Options C & D Target Contract with Activity Schedule (C) or Bill of Quantities (B) Activity Schedule or Bill of Quantities is not a payment document Contractor paid on a Defined Cost plus Fee basis Pain/Gain share on Completion and final account Risk in the target similar to Option A Contractor recovers the costs of preparing compensation events Option C&D Pain/Gain Contractor s share (% set at tender stage) PWDD Employer pays PWDD Prices (target) with CE s at Completion Prices (target) at award 18

19 Employer increasing financial risk Option E Target Price with Activity Schedule E C Cost reimbursable D B Target Price with Bill of Quantities Bill of Quantities A Activity Schedule Contractor increasing financial risk Main Option E Cost reimbursable contract Contractor paid Defined Cost plus the Fee Compensation events require the Contractor to re-forecast 19

20 Employer increasing financial risk Option F F Management contract Target Price with Activity Schedule E C Cost reimbursable D B Target Price with Bill of Quantities Bill of Quantities A Activity Schedule Contractor increasing financial risk Main Option F Management contract Contractor does no or little work Contractor lets work packages Contractor is paid a tendered fee for the work undertaken 20

21 Employer increasing financial risk Option A A Activity Schedule Contractor increasing financial risk Activity Schedule - Definitions 11.2 (20) The Activity Schedule is the activity schedule unless later changed in accordance with this contract (27) The Price for Work Done to Date is the total of the Prices for each group of completed activities and each completed activity which is not in a group. A completed activity is one which is without Defects which would either delay or be covered by immediately following work (30) The Prices are the lump sum prices for each of the activities on the Activity Schedule unless later changed in accordance with this contract. 21

22 The Activity Schedule - Programme 31.4 The Contractor provides information which shows how each activity on the Activity Schedule relates to the operations on each programme which he submits for acceptance. The Activity Schedule - Payment 54.1 Information in the Activity Schedule is not Works Information or Site Information If the Contractor changes a planned method of working at his discretion so that the activities on the Activity Schedule do not relate to the operations on the Accepted Programme, he submits a revision of the Activity Schedule to the Project Manager for acceptance A reason for not accepting a revision of the Activity Schedule is that it does not comply with the Accepted Programme, any changed Prices are not reasonably distributed between the activities or the total of the Prices is changed. 22

23 Activity Schedule - CE s Assessments for changed Prices for compensation events are in the form of changes to the Activity Schedule. The Activity Schedule Effectively they are a bar on a bar chart, which the Contractor has priced An activity can include fixed overheads, time related charges, temporary works, materials on site as well as the permanent works. The activity schedule is drawn from the programme, but is a separate document Under Option A, Priced Contract Contractor is paid price for activity if completed by next assessment date Determines cash flow & the Prices 23

24 Lunch Early warnings The NEC is based on the principle that foresight applied collaboratively mitigates problems and shrinks risk 24

25 Early warnings Clause 16 What is it s aim Note early warnings do not give entitlement to additional money or time only compensation events will do that. Both parties are obligated to give early warnings (10.1) Early warnings 16.1 The Contractor and the Project Manager give an early warning by notifying the other as soon as either becomes aware of any matter which could increase the total of the Prices, delay Completion, delay meeting a Key Date, or impair the performance of the works in use In the notification the Contractor and the Project Manager state whether the early warning must be dealt with immediately. 25

26 Two extremes of understanding: Project Manager stated that he does not want any early warnings on this project two extremes of understanding: Project Manager stated that he does not want any early warnings on this project Project Manager says Give me as many early warnings as you can 26

27 Absence of an early warning If the Project Manager decides that the Contractor did not give an early warning of the event which an experienced contractor could have given, he notifies this decision to the Contractor when he instructs him to submit a quotation for a compensation event (61.5) The Project Manager is able to review and incorporate in his assessment the consequences of a lost opportunity to mitigate the event (63.5) Disallowed Cost if the cost was incurred because the Contractor did not give an early warning the contract requires him to give Early warnings The early warning process is the contractual communication tool to identify potential problems consider proposals to avoid or mitigate their effect seek mutually acceptable solutions Early warnings should be encouraged as a positive process They should not be seen as a precursor to a compensation event claim 27

28 Early warnings exercise Sketch out the flow chart for the early warning process Consider the interaction of the Project Manager and the Contractor Early warnings exercise 28

29 Compensation events Compensation events are the NEC3 ECC s mechanism to reimburse the Contractor for: Risk events Additional works Additional attendances Breaches of contract by the Employer, Project Manager and the Supervisor The compensation event process Deemed acceptance 2 weeks after reminder Notification by PM or C PM s decision 8 week time bar for certain CE s (61.3.) < 2 weeks PM to state any assumptions May be instructed to submit proposed or alternative quotes Instruct a quote C submits quote Should an EW been given? < Deemed acceptance 2 weeks after reminder PM response (accept / not accept / self assess) < 2 weeks PM assessment (if required) < Only changes if PM s assumptions are incorrect Implementation 29

30 Compensation event exercise Identify those events for which the time bar in clause 61.3 does not apply. Determine which of the scenarios are, or are not, compensation events. Evaluating Compensation Events 63.1 The changes to the Prices are assessed as the effect of the compensation event upon the actual Defined Cost of the work already done, the forecast Defined Cost of the work not yet done and the resulting Fee. 30

31 Defined Cost 11.2 (22) Defined Cost is the cost of the components in the Shorter Schedule of Cost Components whether work is subcontracted or not excluding the cost of preparing quotations for compensation events. Fee 11.2 (8) The Fee is the sum of the amounts calculated by applying the subcontracted fee percentage to the Defined Cost of subcontracted work and the direct fee percentage to the Defined Cost of other work. 31

32 Schedule of Cost Components Schedule of Cost Components Contract Data Part 1 People Equipment Plant and materials Charges Contract Data Part 2 Core Clauses Main Option Clauses Secondary Option Clauses Y (UK) Option Clauses Manufacture and fabrication Design Insurance Schedule of Cost Components Works Information Site Information SSCC Pigeon Holes People Equipment P&M CHarges M&F Design In WA Used in WA Purchasing PFPO Off Site Employees Site based In the List Delivery Cancelled Paid Rates in CD Visiting CT Data Packaging Authorities OHD s Agency Purchased Testing PM & S Expenses Credits Specials 32

33 What s in the Fee Everything that can t be pigeon holed! Insurance Bonds and warranties Costs incurred for overheads outside the Working Areas Costs incurred by people outside the Working Areas The cost of preparing quotations for compensation events Profit & risk (corporate rather than operational) Break 33

34 THE ROLE OF THE PROJECT MANAGER AND SUPERVISOR Role of the Project Manager Principal Obligations To act in accordance with the Contract To act as an agent of the Employer To act impartially on certain matters To act in spirit of mutual trust and co-operation 34

35 Role of the Project Manager Project Manager tribunal Subcontractor Contract Admin Adjudicator Subcontractor Comm Mgt Design Employer Contractor Subcontractor H&S Designer Doc Control Supplier Stakeholder Mgt Communications Planning Project Control Key responsibilities of the PM To communicate in a form which can be read, copied and recorded To reply to a communication within the period of reply To issue certificates to the Employer and the Contractor To notify the Contractor before delegating any actions May give an instruction which changes the Works Information To give early warning of matters (delay, cost or performance) To enter early warning matters in the Risk Register To record decisions made by revising the Risk Register To accept particulars of the Contractor s design To accept replacement persons proposed by the Contractor 35

36 Role of the Supervisor Project Manager tribunal Subcontractor Contract Admin Adjudicator Subcontractor Comm Mgt Design Employer Contractor Subcontractor H&S Designer Doc Control Stakeholder Mgt Communications Supervisor Quality Control Supplier Planning Project Control Role of Supervisor Ensure on behalf of the Employer, that the works are provided to the standard and performance required in the Works Information; Witness and/or carry out tests and inspections; Notification of Defects; Issuance of the Defects Certificate. 36

37 What is a Defect? Who s responsibility Correcting Defects Uncorrected Defects Defects Defects Clause 11.2 (5) A Defect is a part of the works which is not in accordance with the Works Information or, a part of the works designed by the Contractor which is not in accordance with this contract or Applicable Law or the Contractor s design which the Project Manager has accepted. 37

38 Defect terminology Defect see 11.2(5) defect correction period The period of time the Contractor has to correct a Defect defect date the period of time after Completion that the Contractor is entitled to return to correct any Defects in the works Defects Certificate A certificate issued after the defects date stating what Defects remain uncorrected or a statement that there are none. Notifying Defects Clause 42.1 Until the defects date, the Supervisor may instruct the Contractor to search for a Defect. Clause 60.1 (10) If no Defect is found the matter is a compensation event unless the search was needed only because the Contractor gave insufficient notice of doing work obstructing a required test or inspection. Clause 42.2 Until the defects date, the Supervisor notifies the Contractor of each Defect as soon as he finds it and the Contractor notifies the Supervisor of each Defect as soon as he finds it. 38

39 Choices on defective work Correction by the Contractor Pre-Completion (43.1) Post-Completion (43.2) defects correction period / defects date / access availability Correction by Others When access is provided Cost to Employer (45.1) When access is not provided Cost to Contractor (45.2) Accepting non-correction of a Defect Submission of a Quotation (44.2) Other commercial implications Clause 11.2 (25) Disallowed Cost Correcting Defects after Completion; correcting Defects caused by the Contractor not complying with a constraint on how he is to Provide the Works stated in the Works Information 39

40 Exercise Sketch (not to scale) a contract time line showing; starting date Completion the defects date (assume 12 months) defects correction periods 1) before Completion, and 2) after Completion Issue of the Defect Certificate Defect Correction Defect notified Defect notified defect correction period for Defects notified before Completion defect correction period Defect notified defect correction period Defect notified defect correction period Defect notified Completion defects date Completion Certificate issued within 1 week of the Project Manager deciding Completion has been achieved Period between Completion and the defects date (typically 12 months) Defects Certificate issued at this point or at the defects date if the defect correction period for the last notified Defect ends before the defects date 40

41 Programme Objectives Understand the programming requirements of an NEC contract Understand the commercial and operational implications of the NEC programming mechanisms The Accepted Programme Reflection of the work done and to be done Not Site information or Works Information Belongs to the Contractor Each new programme when accepted supersedes the previous one Used to assess time in a compensation event Fundamental to the management of a project Requires considerable effort to maintain for good reason 41

42 The Accepted Programme Planned Completion, fluctuates with risk occurrences Terminal float, maintains Contractor s effectiveness Key Dates: Employer requirements clear and unambiguous Acceptances especially Contractor design Plant and Materials the Employer is to provide e.g. specialist materials or standard plant Order and timing of the work documents must be compatible Resource statements be careful when calling for information 84 42

43 Float Free float: the amount of time a task can be delayed before affecting any other task Total float: the amount of time a task can be delayed without affecting planned Completion Terminal float: the float between planned Completion and the Completion Date belongs to the Contractor Free float and total float are available to accommodate the time effects of compensation events and therefore in essence belong to the project Float Start Completion Date Activity 1 TRA Activity 2 TRA Planned Completion Activity 3 Activity 4 TRA Activity 5 TRA Free Float Terminal Float Total Float 43

44 Float Start Completion Date Activity 1 TRA Activity 2 TRA Planned Completion Activity 3 Activity 4 TRA Free Float Activity 5 TRA Terminal Float Time Risk Allowance Activity Activity TRA TRA Start Start Activity A Activity A 1w 1w 4 4 weeks Activity B Activity B 1d 1d 4 weeks4 weeks Activity C Activity C 1d 1d 4 weeks 4 weeks Activity D Activity D 0d 0d 3 Activity E Activity E 2d 2d Activity F Activity F 1d 1d Planned Completion Planned Completion 0d 0d Completion Date Completion Date 0d 0d 44

45 Time Risk Allowance Activity TRA Start Activity A 1w 4 weeks Time Risk Allowance of 1 week Activity B 1d 4 weeks Activity C 1d 4 weeks Activity D 0d Activity E 2d Activity F Planned Completion Completion Date 1d 0d 0d Time Risk Allowance CE 1 week delayed access to A Activity TRA Start Activity A 1w 4 weeks Activity B 1d 4 weeks Activity C 1d 4 weeks Activity D 0d Activity E 2d Activity F Planned Completion Completion Date 1d 0d 0d 45

46 Time Risk Allowance X Activity TRA Start Activity A 1w Activity B 1d 4 weeks Activity C 1d 4 weeks Activity D 0d Activity E 2d Activity F 1d Planned Completion 0d Completion Date 0d Time Risk Allowance Activity TRA Start Activity A 1w 4 weeks Activity B 1d 4 weeks Activity C 1d 4 weeks Activity D 0d Activity E 2d Activity F Planned Completion 1d 0d 1 Week Completion Date 0d 46

47 Impacts on completion Activity Float Start services Activity A 4 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w Activity G 5w 5 weeks float Activity H Planned Completion Completion Date 5w Impacts on completion Activity Float Start services Activity A 4 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w Activity G 5w 5 weeks float Activity H Planned Completion 5w Completion Date Acceleration CE's 47

48 Impacts on completion Activity Float Start services Activity A 4 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w Activity G 5w 5 weeks float Activity H 5w Planned Completion ANYTHING ANYTHING Completion Date Impacts on completion Activity Float Start services Activity A 4 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w Activity G 5w Activity H Planned Completion Completion Date 5w 48

49 Impacts on completion Activity Float Start services Activity A 5 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w 4 weeks Activity G 4w Activity H 4w Planned Completion Completion Date 1w Impacts on completion Activity Float Start services Activity A 4 weeks Activity B Activity C Activity D Activity E 4 weeks Activity F 5w Activity G 5w Activity H Planned Completion Completion Date 5w 49

50 Impacts on completion Activity Float Start services Activity A Activity B Activity C Activity D Activity E 4 weeks Activity F 5w 2 weeks Activity G 6w Activity H 6w Planned Completion Completion Date 1w 1w Dealing with Early Warnings The Contractor shows on each revised programme: The effects of implemented compensation events So what should be put onto a programme in terms of early warnings? 50

51 Dealing with Early Warnings Activity Duration DIG HOLE INSTALL PIPE BACKFILL Activity 4w Duration DIG Activity HOLE Activity 2w Duration 4w -1 Duration INSTALL DIG Activity HOLEPIPE DIG HOLE 2w Duration 2w 4w w INSTALL ACCESS BACKFILL INSTALL DIG ROAD HOLEPIPE INSTALL 4w PIPE 2w 4w 2w BACKFILL INSTALL ACCESS PIPE BACKFILL ROAD 4w 2w 2wOBSTRUCTION ENCOUNTERED INSTALL BACKFILLACCESS INSTALL ROADACCESS ROAD 4w 2w 4wEARLY WARNING OBSTRUCTION NOTIFIED (WORK ENCOUNTERED STOPPED) INSTALL ACCESS ROAD 4w RISK REDUCTION EARLY OBSTRUCTION WARNING MEETING ENCOUNTERED OBSTRUCTION NOTIFIED (WORK ENCOUN STOP EARLY OBSTRUCTION RISK WARNING REDUCTION ENCOUNTERED EARLY NOTIFIED WARNING MEETING (WORK NOTIFI STOP EARLY RISK WARNING REDUCTION NOTIFIED RISK MEETING REDUCTION (WORK STOP M RISK REDUCTION MEETING Dealing with Early Warnings Activity Duration DIG HOLE INSTALL PIPE BACKFILL INSTALL ACCESS ROAD 4w 2w 2w 4w OBSTRUCTION ENCOUNTERED EARLY WARNING NOTIFIED (WORK STOPPED) RISK REDUCTION MEETING Risk reduction meeting actions: Designer revisits design of access road to consider 3 options 1. Relocate pipe route 2 weeks 2. Breakout section of obstruction 1 week 3. Breakout all of the concrete obstruction 6 weeks What is done and what is shown on the revised programme? 51

52 Dealing with Early Warnings We are in Week 4 and due to submit a revised programme Given the above what would you show on the revised programme that you are about to submit? 1. Show event on programme but with no effect on planned Completion 2. Show event and when linked/rescheduled affects planned Completion by 1/2/3/4/6/7/8 weeks? Consider what time effect should be due this event Dealing with Early Warnings Activity Duration DIG HOLE EW001 Risk reduction meeting EW001 Design review Complete Excavtion EW001 Additional Works INSTALL PIPE BACKFILL INSTALL ACCESS ROAD 3w 1w 1w 1w 1w 2w 2w 4w Show 3 week delay to the excavation Programme narrative explains that EW is under review and further time may / may not result once more details are established Next submitted programme shows full effect of what is likely to be a compensation event 52

53 Dealing with Early Warnings INTENT To show realistic effect to contract on programme and get accepted as latest Accepted Programme FACT Show minimum effect that this event will have on programme: HAVE already lost one week between EW notified and RR meeting WILL take minimum one week for designers to review options WILL take minimum one week for quickest solution SOLUTION Show three week delay to activity - programme Programme narrative explains that the event is under review and further time effect may/may not result once more details established Next revised programme will show full affect of what is likely to be classed as a compensation event at that stage Assessing Time in CE s 63.3 A delay to the Completion Date is assessed as the length of time that, due to the compensation event, planned Completion is later than planned Completion as shown on the Accepted Programme. A delay to a Key Date is assessed as the length of time that, due to the compensation event, the planned date when the Condition stated for a Key Date will be met is later than the date shown on the Accepted Programme 53

54 Programme Example Programme Example Activity Duration Start services Activity A Activity B Activity C Activity D Activity E Activity F Planned Completion Terminal float Completion Date 4w 2w 4w 2w 2w 4w 1w Activities A-E are critical Activity F is non-critical Delay damages at 10,000 per week 54

55 Programme Example Activity Duration Start services Activity A Activity B Activity C Activity D Activity E Activity F Planned Completion Terminal float Completion Date 4w 2w 4w 2w 2w 4w 1w Week 4 submission A is three weeks behind and able to recover Unable to accelerate any future activities 1 week terminal float used up therefore pc is 2 weeks late Programme Example Activity Duration Start services Activity A Activity B Activity C Activity D Activity E Activity F Planned Completion Completion Date 7w 2w 4w 2w 2w 4w Programme reviewed and accepted at week 5. Programme is Accepted and therefore is re-baselined 55

56 Programme Example Activity Duration Start services Activity A Activity B Activity C Activity D Activity E Activity F Planned Completion Completion Date 7w 2w 4w 2w 2w 8w At week 6 the Project Manager issues CE001 the doubles the scope of Activity F from 4 weeks to 8 weeks What happens to planned Completion and the Completion Date Is the Contractor liable for any delay damages ( 10k / week)? Programme Example Planned Completion is week 17, Completion Date still week 15 and Contractor liable for 20,000 delay damages? Planned Completion week 17. Completion Date moves to week 19 and Contractor liable for 0 damages? Planned Completion week 17, Completion Date moves to week 17, and Contractor liable for 0 damages? Something else.? 56

57 Programme Example 63.3 A delay to the Completion Date is assessed as the length of time that, due to the compensation event, planned Completion is later than planned Completion as shown on the Accepted Programme. A delay to a Key Date is assessed as the length of time that, due to the compensation event, the planned date when the Condition stated for a Key Date will be met is later than the date shown on the Accepted Programme Programme Example Activity Duration Start services Activity A Activity B Activity C Activity D Activity E Activity F Planned Completion Completion Date 7w 2w 4w 2w 2w 8w Test under 63.3 is change to planned Completion Planned Completion is unaffected by the CE Answer is (1): Planned Completion is 17, Completion Date still week 15 and Contractor remains potentially liable for delay damages at 20,000 57

58 Programme Example Be careful when a revised programme shows a delay to planned Completion Date Check there is nothing you can practically do, i.e. Increase resources Overlap activities to be a concurrent as possible Remember the programme needs to be realistically and achievable Remember liability for damages hence back to RELATIONSHIPS Summary General Overview & principles Payment Early warnings and compensation events Roles and responsibilities, Defects and the programme 58

59 The Cycle of (NEC) Life EW s Pay CE s Prog Pay The works Pay T&D Pay Questions? 59