Managing programme change on an NEC3 form of contract

Transcription

1 Managing programme change on an NEC3 form of contract

2 Presentation: Summary of Key NEC3 Programme Principles Timing of compensation events relative to the last Accepted Programme Assessing effects of a compensation event

3 Clause 31 The programme Items to be shown on the programme include: starting date/completion Date/Key Dates planned Completion order and timing of operations to Provide the Works float time risk allowances health and safety requirements Plant & Materials from Employer acceptances information from Others statements of how the Contractor plans to do the work

4 Reasons for not accepting a programme Under clause 31.3 there are only four reasons not to accept a programme: The Contractor s plans which it shows are not practicable It does not show the information which this contract requires It does not represent the Contractor s plans realistically or It does not comply with the Works Information Project Manager has to accept or not accept the programme within two weeks. If the Project Manager withholds acceptance for a reason not stated in contract it is a compensation event. If the Project Manager does not respond within the period for Acceptance it is NOT deemed accepted.

5 Clause 32 - Revising the programme Contractor shows on each revised programme: actual progress achieved on each operation activity and affect upon remaining work effects of implemented compensation events how Contractor plans to deal with any delays and to correct notified Defects any other changes that Contractor proposes to make 32.2 Contractor submits a revised programme: Within the period for reply after Project Manager has instructed When the Contractor chooses to At no longer interval than stated in the contract

6 If programme not accepted: Neither party clear on the Completion Date and contractor entitlement in terms of outturn cost 25% of the cumulative Price for Work Done to Date deducted until first programme submitted showing the information the contract requires Employer will in the absence of a newly accepted programme assess change (CE s) on the last accepted programme Important to both parties programme regularly accepted. Otherwise enjoy the traditional end of project bun-fight to sort out the final account

7 Clause 64 Project Manager s Assessment The Project Manager may make his own assessment of a compensation event for the reasons stated in Clause 64.1: if the Contractor has not submitted a quotation within the timescale, the Contractor has not assessed the compensation event correctly and does not instruct the Contractor to submit a revised quotation, he has not submitted a programme or alterations to a programme which this contract requires him to submit or If, the Project Manager has not accepted the Contractor s latest programme for one of the reasons stated in this contract.

8 Quote from a senior lawyer: Programme under the NEC3 is the beating heart of the contract

9 Example of Timing of Events

10 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F float planned Completion Completion Date

11 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F planned Completion Completion Date Acceleration CE s

12 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F planned Completion Completion Date ANYTHING!!

13 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F CE planned Completion Completion Date

14 WEEK NUMBERS Start Activity A Accepted programme Activity B Activity C Activity D CE Activity E Activity F 1w float planned Completion Completion Date

15 WEEK NUMBERS Start Activity A 1w delay Activity B Activity C Activity D CE (Delay Damages) Activity E Activity F 2w planned Completion Completion Date

16 WEEK NUMBERS Start Activity A Accepted programme Activity B Activity C Activity D Activity E Activity F 1w float planned Completion Completion Date

17 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F planned Completion Completion Date CE

18 Start WEEK NUMBERS Activity A Activity B Activity C Activity D Activity E Activity F planned Completion Completion Date CE

19 Start Activity A Activity B Activity C Activity D Activity E Activity F WEEK NUMBERS planned Completion Completion Date CE 1w float No delay damages Forecast cost 1 week delay in CE

20 Common Questions: what programme do you use to assess a compensation event what progress/change (if any) should you first take into account?

21 Clause 62.2 states that if the programme for remaining work is altered by the compensation event, the Contractor includes the alterations to the Accepted Programme in his quotation. Clause 63.3 also states that 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.

22 What then happens if that Accepted Programme is several months old and contains logic that is now clearly known to be wrong and varying degrees of progress compared to that originally planned?

23 Systematic input of a CE into a programme Sequence progress programme with works to date reschedule programme and check if any effect to Key Dates or planned Completion. If yes reschedule to mitigate effect rebaseline (interim) programme input CE and reschedule programme to assess effect save and print a filtered programme demonstrating the effect the CE has had if there is a second CE to input at the same time then rebaseline once more and repeat the process to assess any FURTHER effect that the second CE has had

24 Systematic input of a CE into a programme WEEK NUMBERS EXCAVATE CE001 WORKS INSTALL PIPE INSTALL ACCESS ROAD BACKFILL REFURB BUILDING PLANNED COMPLETION Last agreed programme was week 6 now week 8 CE002 involves 2 weeks additional works to Refurb Building 1. Progress programme 2. Rebaseline 3. Input CE, add logic links and rebaseline

25 Systematic input of a CE into a programme WEEK NUMBERS EXCAVATE CE001 WORKS INSTALL PIPE INSTALL ACCESS ROAD BACKFILL REFURB BUILDING PLANNED COMPLETION 1. Progress programme

26 Systematic input of a CE into a programme WEEK NUMBERS EXCAVATE CE001 WORKS INSTALL PIPE INSTALL ACCESS ROAD BACKFILL REFURB BUILDING PLANNED COMPLETION 1. Progress programme 2. Rebaseline (Interim)

27 Systematic input of a CE into a programme WEEK NUMBERS EXCAVATE CE001 WORKS INSTALL PIPE INSTALL ACCESS ROAD BACKFILL REFURB BUILDING CE002 ADDITIONAL WORKS PLANNED COMPLETION 1. Progress programme 2. Rebaseline (interim) 3. Input CE002, add logic links and rebaseline

28 Systematic input of a CE into a programme WEEK NUMBERS EXCAVATE CE001 WORKS INSTALL PIPE INSTALL ACCESS ROAD BACKFILL 1 week float REFURB BUILDING CE002 ADDITIONAL WORKS PLANNED COMPLETION 1. Progress programme 2. Rebaseline (interim) 3. Input CE, add logic links 4. Once agreed Rebaseline (permanent) and note any change to Critical Path

29 Relative Movement of Completion Date/ planned Completion with Compensation Events

30 Movement of Completion Date Month 1 Start Activity A Activity B Accepted Programme 4m 4m planned Completion Completion Date

31 Movement of Completion Date month 2 Start Activity A Activity B Accepted Programme 4m 4m CE 01 planned Completion Completion Date 2m 2m

32 Movement of Completion Date month 3 Start Activity A Activity B Accepted Programme 4m 4m CE 01 CE 02 planned Completion Completion Date 2m 4m 2m

33 Movement of Completion Date month 4 Start Activity A Activity B Accepted Programme 4m 4m CE 01 CE 02 CE 03 planned Completion Completion Date 2m 2m 6m 2m

34 Importance of Detail in the Programme WEEK NUMBERS Activity A Activity B Activity C Activity D planned Completion Completion Date Activity B is electrical works in six separate rooms each needing two electricians for one week each. At the start of week 4 you are informed that there is no access to two of the rooms and they will not be available for five weeks. What will the effect of this CE be?

35 Delay to Completion Date Example WEEK NUMBERS Activity A Activity B1 Activity B2 Activity B3 Activity B4 Activity B5 Activity B6 Activity C Activity D What if: planned Completion Completion Date CE CE a) B3 has to follow B2, or b) B1-B6 can be in any order What is the effect now?

36 Contractor: Make sure your programme fully complies with clause 31.2 (and 32.1) Show difference between planned Completion/ Completion Date Comprehensive programme narrative with each submission Programme review meeting during acceptance period with PM If no response to programme call a meeting and try to bring it to a head

37 Employer: Review programme well within two week response period and give early comment Aim for a one week response for programme acceptance where ever possible Give clear specific detailed reasons why it is not accepted - only four reasons under the contract Accept with comments comments being minor issues that can be put right on the next programme issue

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39 Conclusions/Summary Programme is the beating heart of the contract Both parties need to work together to ensure that a programme is regularly updated and accepted through out the life of the contract Keep on top of change add compensation events to the programme at the earliest opportunity to agree effect of change as you go however hard at a point in time it appears to be (as it will only ever get worse). Any questions/thoughts?