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NEC3 Engineering & ConstructionContract

Role of the Project ManagerIan Hedley BSc (Hons) MRICS MACostE MAPM

Wednesday 17th September 2014Ramada Encore, Haydock

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Aims• Background to NEC Contracts

• Identify what the Project Manager roleinvolves

• Identify some key duties / actions

• Suggest ways to manage the process

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Objectives

To understand the key duties of the ECC Project

Manager and what procedures can be put in

place to ensure successful delivery

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Who Am I?• MRICS QS (Infrastructure)• NEC2 / NEC3 Experience:

– 15 yrs+– ECC Project Manager– Accreditation via NEC®

• Employer & Contractor

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A bit of background

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History

• Construction pre nineties…– Claims culture– No alternative procurement strategies– Clients were demanding increased certainty

• NEC 1st edition: March 1993• Latham Report: Constructing The Team• NEC ECC 2nd Edition: November 1995• NEC3: July 2005 (amended June 2006 & April 2013)

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NEC Suite of Contracts

• Works

• Services

• Supply

• Other contracts

• Miscellaneous Documentation

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NEC Philosophy

• Clear and simple• Plain language

• Flexible• Modular; multi-discipline; multi-sector

• Stimulus to good management• Emphasis on procedures, communication and

programme

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NEC ECC Structure – Core Clauses

1. General2. The Contractor’s main responsibilities3. Time4. Testing and Defects5. Payment (Choose one of 6 options)6. Compensation Events7. Title8. Risks and insurance9. Termination

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• Contracting Entities / Parties (Cl. 11.2(11)):• Employer• Contractor

• Participants (Cl. 14):• Project Manager• Supervisor

• Others (Cl. 11.2 (10)):• Subcontractor(s)• Supplier(s)• Adjudicator• Others (anyone except the above)

NEC3 ECC Key PlayersItalics – therefore identified in the Contract Data

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The Project Manager

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The Project Manager

• Administers the contract (impartially)

• Generally, the Employer’s Agent

• Can delegate any responsibility

• Employer has no contractual right to challengethe actions or decisions of the Project Manager

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The Project Manager

• Only person who can issue instructions changingthe Works Information

• Project Manager has a duty of impartiality…• Assessing the amount due• Assessing compensation events• Issuing the Termination Certificate

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Project Manager Duties

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Key Project Manager Duties

• Early Warnings

• Programme

• Compensation events

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Key Project Manager Duties

• Early Warnings

• Programme

• Compensation events

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Project Manager & Early Warnings

• Every construction project has an element of risk• ECC acknowledges this – tries to deal with this in

a collaborative way (spot, discuss, mitigate/avoid)• Early Warning Process (Clause 16) – 4 stages:

– Notify– Risk Reduction Meeting (if required)– Identify outcome / action plan– Update risk register

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Project Manager & Early Warnings

• How to manage?1. Ensure awareness of the Early Warning process at the

outset – joint training / briefing session chaired by PM2. Agree a joint system to use – proformas as a minimum3. Update the register and circulate to all parties4. Meet regularly to review the register5. Be patient / lead the process

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Key Project Manager Duties

• Early Warnings

• Programme

• Compensation events

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Project Manager & the Programme

• Fundamental to success of the project• Have a plan or plan to fail…

• ECC acknowledges this – programme is the heartbeat of the contract

• Section 3 of the contract:– Defines what should be included in the programme (cl. 31)– The process for updating the programme (cl. 32)– The process for accepting the programme at regular intervals

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NEC3 ECC – Clause 31.2

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Project Manager & the Programme

• How to manage?• Spend a day together to jointly review the programme

– Collaborative way of working– Agree together = Win-Win!

• Ensure correct submission and acceptance (cl. 13.1)– If not – follow the procedure (25% deduction from PWDD)

• Repeat the above on a regular basis– Schedule in review meetings at the outset (min of monthly)

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Key Project Manager Duties

• Early Warnings

• Programme

• Compensation events

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Project Manager & Comp’ Events

• Duty to notify the Contractor of variations!• Light the touch paper and stand back is not an option…

• ECC encourages collaborative working and theComp’ Event process is at the heart of this

• Section 6 of the contract:– Defines what constitutes a valid change (cl. 60)– The process for notifying (cl. 61) , quoting (cl. 62), assessing

(cl. 63/64), and implementing (cl. 65)

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Project Manager & Comp’ Events

• How to manage?• Ensure awareness of the compensation event process

at the outset – joint training / briefing session chairedby PM

• Agree a joint system to use – proformas as a minimum• Create and maintain a register / circulate to all parties• Meet regularly to review any contentious quotations

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NEC3 ECC – Compensation EventsProcess / Timescales

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Project Manager & Comp’ Events

• Does the event arise from a fault of the Contractor? No• Has the event happened? Yes• Does the event have an affect on the Contractor’s costs or

Key Date / Completion? Yes• Is the event one of the compensation events stated in this

contract? Yes• Has more than 8 weeks passed since the Contractor became

aware of the event? No

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Other Suggestions

• Employers – only appoint competent people!• Mad Billy… no capacity for silence (Cl. 60.1 (9))

• Be proactive!• Only act in accordance with the contract

• Use the contract – don’t stick it in the drawer

• Ensure you have adequate support• QS / Cost Engineer, planner, document controller

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Other Suggestions

• Advocate use of online collaborative softwaresolutions

• Less mistakes• Ensures compliance• Reduces risk• Centralised Data Records / Audit trail• Cost reductions (for all parties)

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Recap

• Project Manager is key to success• Main role: to administer the contract (impartially)• Has many duties and actions• Most likely will need some support• Should only act in accordance with the contract

• Stick to timescales• Read the contract!

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End

Any questions?

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www.solomonseurope.co.uk