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NEC3:Programme Provisions under NEC3Contracts nec 04/2012

neccontract.com nec 04/2012

NEC3: Programme provisions under theNEC3 contract


ECC Contract Programme Requirements

Issues with other forms of contract

Main contractual programme requirements

Reasons and sanctions for non-acceptance

Revised programmes

Acceleration

Types and ownership of float

Early warnings and compensation events

Other NEC3 Contracts Programme RequirementsHow the other contracts within the NEC3 suite differ from ECC


ECC Contract

Programme Requirements


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Issues with other forms of contract and

management of programme:

Retrospective analysis of time delay andentitlement subjective to say the least!

No firm requirement on how to manageprogramme during contractOften comparing current programme to originalbaseline programme (which has noresemblance as to how works now being done).


Clause 31 The programme

31.2 - Items to be shown on the programme include:

starting date/Completion Date/Key Dates

planned Completion

ECC Section 3 Time

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12 w

Planned Completion / Completion Date

4w

4w

4w

3w

3w

3w


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Start

Activity AActivity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12 w

4w4w

4w

3w

3w

3w

CEsAcceleration

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3wANYTHING!!


Clause 31 The programme



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 Contractorplans to do the work


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Reasons for not accepting a programme

Under clause 31.3 there are only four reasonsnot to accept a programme:

The Contractors plans which it shows are not practicable

It does not show the information which this contract requires

It does not represent the Contractors plans realistically or

It does not comply with the Works Information

Project Manager has up to two weeks in which to accept or not accept the

programme. If the Project Managerwithholds acceptance for a reason notstated in contract it is a compensation event under clause 60.1(9)

Acceptance of a programme by the Project Manageris not acondition precedent to the Contractorproceeding with the work


Sanctions/problems of non-acceptance

25% of the cumulative Price for Work Done to Datededucted until first programme submitted showing theinformation the contract requires

Employer will in the absence of a newly acceptedprogramme assess change(CE s) on the last acceptedprogramme

Neither party clear on the Completion Date andcontractor entitlement in terms of time or money

Equally important to both parties programme

regularly accepted.


Clause 32 - Revising the programme

32.1 -Contractorshows on each revised programme:actual progress achieved on each operation activityand affect upon remaining workeffects of implemented compensation eventshow Contractorplans to deal with any delays and tocorrect notified Defectsany other changes that Contractorproposes to make

32.2 Contractorsubmits a revised programme:Within the period for replyafter Project ManagerhasinstructedWhen the Contractorchooses toAt no longer interval than stated in the contract


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Clause 36 Acceleration

Project Managermay instruct Contractorto submitquotation for an acceleration to achieve completion beforethe Completion Date

this includes proposed changes to Prices and revisedprogrammeContractorsubmits details of the assessment with thequotation

Contractorsubmits a quotation or gives reasons for notdoing so within the period for reply

Note no option for the Project Manager to make his ownassessment of an acceleration quotation!


Activity schedule- Option A

31.4 The Contractor provides informationwhich shows how each activity on the ActivitySchedule relates to the operations on eachprogramme which he submits for acceptance

11.2(27) states that the Price for Work Done toDate is the total of the Prices for completedactivities on the activity schedule


Types of Float

Total Float

Time Risk Allowance

Terminal Float


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Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12 w

1. Total Float

4w

4w

4w

3w

3w

3w

3w float


This float is available to either party whenassessing revised programmes and theeffects of delay/change in logic/compensation events

Used by whoever gets there first!Programme needs updated regularly todemonstrate true effect.

1. Total Float


Aim is to show that elements of risk have been applied toeach operation. Are owned by the Contractor( to cover hisrisks)

This gives some comfort to the Employerthat particularly

critical path is achievable

Part of normal tender process i.e.

200m of pipe @ 15.5m/gang/day = 12.9 so say 15 days

2. Time Risk Allowance

Clause 31.2 requires you to show provisions for time riskallowances


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Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12 w

2. Time Risk Allowance

4w

4w

4w

3w

3w

3w

TRA

0d

3d

1d

1d

0d

2d

1d

0d

0d

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

2. Ownership of Time Risk Allowance

4w

4w

4w

3w

3w

3w 3w float

Time Risk Allowance =3 days

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3w

CE 3 day delay access to A


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Start


Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

3w 2d4w

4w

3w

3w

3w

?

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3w3 days


3. Terminal Float

Difference between planned Completionand Completion Date

Generated during tender process or duringthe life of the contract

Owned by the Contractor


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Start


Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 3 4 8 12

3w4w

4w

3w

3w

3w1w

terminalfloat

3. Ownership of Terminal Float

Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 3 4 8 12

3w

4w

4w

3w

3w

3w

CE 1 WEEK


Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 3 4 8 12

3w

4w

4w

3w

3w

3w

1 week



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Completion Date moves out the amountthat planned Completion moves out due tothe effects of a Compensation Event(clause 63.3)

This makes it contractually clear that it isowned by the Contractor

Can then only be brought back byacceleration.




EARLY WARNINGS


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Clause 31.2 of the ECC2 contract stated that on each revisedprogramme you should show:

The effects of implemented compensation events and of notifiedearly warning matters.

With the revision of ECC3, the reference to early warning matters nolonger exists as it was potentially confusing showing the potential effectsof numerous events on planned Completion that may or may nothappen.

The Accepted Programme should not be the place to be showing what

if scenarios or possible effects rather than the actual known effects.

Early Warnings on the Programme


Change to clause 32.1 does not mean that youcan not show early warnings on a programmethat clause along with clause 31.2 is a list of theminimum requirements

Early warnings are matters that need to be

reviewed now when the project has a chance tominimise any potential effect



To show them on the programme I would recommend:

Show all outstanding early warnings on the programme that couldeffect programmed works as a task (rather than a milestone)

The start date would be fixed as the date the EW was issued, withthe remaining duration the earliest you believe you could get ananswer (hence activity is still live on the programme).

Link early warning to item(s) of programme that itcould effect

Resultant total float will be indicative of the urgency of the matter tobe resolved although this is only indicative as it depends what theanswer is.



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If early warning is having an impact on

the programme then by default it is no

longer an early warning that might affect

the project



COMPENSATION EVENTS


Clause 31.2

The Contractorshows on each revisedprogramme:

The effects of implemented compensationevents


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Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3w

3w float


Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3w

CE 1


Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

4w

4w

4w

3w

3w

3w

CE 1

1w float

Accepted programme


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Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

CE 02

planned Completion

Completion Date

0 4 8 12 13

4w

4w

4w

3w

3w

3w

CE 1

CE 2

+ 1 week

+ 1 week


Start

Activity A

Activity B

Activity C

Activity D

Activity EActivity F

CE 02

planned Completion

Completion Date

0 4 8 12 13

4w

4w

4w

3w

3w

3w

CE 1

CE 2

+ 1 week

+ 1 week

1w float

Forecast cost1 week delay

in CE 2



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Compensation Event Quotations

Under clause 62.2 if the remaining workswork is altered by the compensation event,then the Contractor includes thealterations to the Accepted Programme inhis quotation.

Clearest way to do this would be to includethe programme within the quote to back upthe cost/time claimed for.


ECS (Engineering and ConstructionSubcontract)

PSC (Professional Services Contract)

TSC (Term Service Contract)

SC (Supply Contract)

Other NEC Forms of ContractProgramme Requirements:


The requirements for a Subcontractor under

an ECS contract are almost identical as

that of a Contractor under an ECC contract,

the only difference being terminology.

Engineering and ConstructionSubcontract


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planned Completion

order and timing of operations to Provide the Works

float



Plant & Materials from Employer/Contractor

acceptances


statements of how the Subcontractorplans to do the work

Engineering and Construction Subcontract


Same reasons for non-acceptance

Same timescales in which programme has to beaccepted

Same requirement to update and revise theprogramme

Same timescale intervals in which the

Subcontractor has to submit revisedprogrammes

Same sanctions apply until first programmesubmitted showing the information the contractrequires (25% PWDD)

Engineering and Construction Subcontract


The requirements for a designer under

a PSC contract are very similar to that of a

Contractor under an ECC contract, the main

difference being some terminology.

Professional Services Contract


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planned Completion

order and timing of operations to Provide theServices

float



Access to a person, place or thing

information from Employer and Others

statements of how the Consultant plans to do the work

Other information which the Scope requires the consultant to show ona programme



The nature of the content of the programme will be

different because it is managing processes and

design, rather than physical construction works.

However, the design of a project just like the

construction is simply a series of activities that

have dependencies upon each other leading to a

Completion Date.



Similar reasons for non-acceptance



Same timescale intervals in which theConsultant has to submit revised programmes

No 25% sanction to with hold money for non-acceptance of programme



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The requirements for a TSC contract are a

different due to the nature of the work being

carried. TSC is providing a service to

maintain the existing standard of a site or

location, rather than constructing something

new.

Called a plan rather than a programme, andfound in section two of the contract rather thansection three

Term Services Contract


21.2 - Items to be shown on theplan include:

starting date/ end of service period

order and timing of the work of Employer and Others



access

Plant & Materials from Employer

acceptances


statements of how theContractorplans to do the work

Other information that the Service Information requires

Term Services Contract clause 21.2


Quite often the services will be in part or whollyinstructed under Task Orders

In this case the initial programme will containlittle more than the basic contract information

Task Orders can be added to the Plan during thelife of the project making the plan a keymanagement and commercial tool, very muchlike the programme under an ECC contract.

Term Services Contract


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Same timescale intervals in which theConsultant has to submit revised programmes

Same sanctions apply until first programmesubmitted showing the information the contractrequires (25% PSPD)

Term Service Contract


The requirements for a Supplier are less than

that of an ECC contract again because of the

nature of the service being provided, but

much more significant than normally asked for

of a Supplier under a traditional purchase

order/contract agreement.

Supply Contract



starting date/ Delivery Date

planned Delivery

Dates which to Provide the Goods the Supplier needs

access to Purchaser s premises

acceptances

plant and materials and other things to be provided by the Purchaser

Dates when Supplier plans to carry out factory inspection tests orinspections

Other information which the Goods Information requires to be shown ona programme (such as float, TRA etc)

Supply Contract


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Same requirement to update and revise the programme

Same timescale intervals in which the Supplier has to

submit programmes

No 25% sanction to with hold money for non-acceptanceof programme

Supply Contract


ECSC (Engineering and ConstructionShort Contract)

ECSS (Engineering and Construction

Short Subcontract)

TSSC (Term Service Short Contract)

SSC (Short Supply Contract)

Short Forms of Contract ProgrammeRequirements:


Short forms of contract do not mandate the level of detailand requirement of the programme the same way thatthe fuller versions do, hence the long list within clause31.2 does not exist

However, it states that the programme requirements areas per the Works Information, so you need to dictate theprogramme requirements within the Works Information.

This could be to the full detail that the main contractrequires if it is deemed suitable/ necessary for a givenproject.

Short forms of contract


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The NEC suite of contracts all focus on programme, withthe regular accepted programme becoming a key driverboth operationally and commercially

Could be seen as quite onerous in terms of what shouldbe included within a compliant programme and the

requirement to regularly update. However, the contractis simply instilling good practise project managementand nothing that the Contractor should not want to be

doing for themselves.

Summary of programming under NEC contracts


Requires the main party to accept a programme, or givereasons for not accepting so that both parties know

where they stand.

Accepted programme becomes the revised contract

programme and the new baseline to measure futureprogress/change against.

Summary of programming under NEC contracts

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