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NEC3:Programme Provisions under NEC3 Contracts © nec 04/2012

neccontract.com © nec 04/2012

NEC3: Programme provisions under the NEC3 contract


ECC Contract Programme RequirementsIssues with other forms of contract

Main contractual programme requirementsReasons and sanctions for non-acceptance

Revised programmesAcceleration

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



Issues with other forms of contract and management of programme:

Retrospective analysis of time delay and entitlement subjective to say the least!No firm requirement on how to manage programme during contract Often comparing current programme to original baseline programme (which has no resemblance 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


Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12 w

4w

4w

4w

3w

3w

3w

CE sAcceleration

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 programme31.2 - Items to be shown on the programme include:

starting date/Completion Date/Key Datesplanned Completionorder and timing of operations to Provide the Worksfloattime risk allowanceshealth and safety requirementsPlant & Materials from Employeracceptances information from Othersstatements of how the Contractor plans to do the work



Reasons for not accepting a programme

Under clause 31.3 there are only four reasonsnot 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 up to two weeks in which to accept or not accept the programme. If the Project Manager withholds acceptance for a reason not stated in contract it is a compensation event under clause 60.1(9)

Acceptance of a programme by the Project Manager is not acondition precedent to the Contractor proceeding with the work


Sanctions/problems of non-acceptance

25% of the cumulative Price for Work Done to Date deducted until first programme submitted showing the information the contract requiresEmployer will in the absence of a newly accepted programme assess change(CE s) on the last accepted programme Neither party clear on the Completion Date and contractor entitlement in terms of time or money

Equally important to both parties programmeregularly accepted.


Clause 32 - Revising the programme

32.1 - Contractor shows on each revised programme:actual progress achieved on each operation activity and affect upon remaining workeffects of implemented compensation eventshow Contractor plans to deal with any delays and to correct notified Defectsany other changes that Contractor proposes to make

32.2 Contractor submits a revised programme:Within the period for reply after Project Manager has instructedWhen the Contractor chooses toAt no longer interval than stated in the contract



Clause 36 Acceleration

Project Manager may instruct Contractor to submit quotation for an acceleration to achieve completion before the Completion Date

this includes proposed changes to Prices and revised programmeContractor submits details of the assessment with the quotation

Contractor submits a quotation or gives reasons for not doing so within the period for reply

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


Activity schedule- Option A

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

11.2(27) states that the Price for Work Done to Date is the total of the Prices for completed activities on the activity schedule


Types of Float

Total Float

Time Risk Allowance

Terminal Float


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

3w3w float


This float is available to either party when assessing revised programmes and the effects of delay/change in logic/ compensation eventsUsed by whoever gets there first!Programme needs updated regularly to demonstrate true effect.

1. Total Float


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

This gives some comfort to the Employer that 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 risk allowances


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

3w3w 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


Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

planned Completion

Completion Date

0 4 8 12

3w 2d

4w

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 Completion and Completion DateGenerated during tender process or during the life of the contractOwned by the Contractor


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

3w1w terminal float

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




Completion Date moves out the amount that planned Completion moves out due to the effects of a Compensation Event (clause 63.3)This makes it contractually clear that it is owned by the ContractorCan then only be brought back by acceleration.




EARLY WARNINGS



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

The effects of implemented compensation events and of notified early warning matters.

With the revision of ECC3, the reference to early warning matters no longer exists as it was potentially confusing showing the potential effects of numerous events on planned Completion that may or may not happen.

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 you can not show early warnings on a programme that clause along with clause 31.2 is a list of the minimum requirements

Early warnings are matters that need to be reviewed now when the project has a chance to minimise any potential effect



To show them on the programme I would recommend:

Show all outstanding early warnings on the programme that could effect programmed works as a task (rather than a milestone)The start date would be fixed as the date the EW was issued, with the 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 it could effectResultant total float will be indicative of the urgency of the matter to be resolved although this is only indicative as it depends what the answer is.




If early warning is having an impact onthe programme then by default it is no longer an early warning that might affect the project



COMPENSATION EVENTS


Clause 31.2

The Contractor shows on each revised programme:

The effects of implemented compensation events



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

3w3w 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



Start

Activity A

Activity B

Activity C

Activity D

Activity E

Activity F

CE 02planned 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 E

Activity F

CE 02planned CompletionCompletion Date

0 4 8 12 13

4w

4w

4w

3w

3w

3w

CE 1

CE 2

+ 1 week

+ 1 week

1w float

Forecast cost 1 week delay

in CE 2




Compensation Event Quotations

Under clause 62.2 if the remaining works work is altered by the compensation event, then the Contractor includes the alterations to the Accepted Programme in his quotation. Clearest way to do this would be to include the programme within the quote to back up the cost/time claimed for.


ECS (Engineering and Construction Subcontract)PSC (Professional Services Contract)TSC (Term Service Contract)SC (Supply Contract)

Other NEC Forms of Contract Programme 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 Construction Subcontract




starting date/Completion Date/Key Dates

planned Completionorder and timing of operations to Provide the Works

float

time risk allowanceshealth and safety requirements

Plant & Materials from Employer/Contractor

acceptances information from Others

statements of how the Subcontractor plans to do the work



Same reasons for non-acceptanceSame timescales in which programme has to be acceptedSame requirement to update and revise the programme

Same timescale intervals in which the Subcontractor has to submit revised programmes

Same sanctions apply until first programme submitted showing the information the contract requires (25% PWDD)



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




starting date/Completion Date/Key Datesplanned Completionorder and timing of operations to Provide the Servicesfloattime risk allowanceshealth and safety requirementsAccess to a person, place or thinginformation from Employer and Othersstatements of how the Consultant plans to do the workOther information which the Scope requires the consultant to show on a 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-acceptanceSame timescales in which programme has to be accepted

Same requirement to update and revise the programme

Same timescale intervals in which the Consultant has to submit revised programmesNo 25% sanction to with hold money for non-acceptance of programme




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 orlocation, rather than constructing something new.

Called a plan rather than a programme, and found in section two of the contract rather than section three

Term Services Contract


21.2 - Items to be shown on the plan include:

starting date / end of service periodorder and timing of the work of Employer and Otherstime risk allowanceshealth and safety requirementsaccessPlant & Materials from Employeracceptances information from Othersstatements of how the Contractor plans to do the workOther information that the Service Information requires

Term Services Contract clause 21.2


Quite often the services will be in part or wholly instructed under Task OrdersIn this case the initial programme will contain little more than the basic contract informationTask Orders can be added to the Plan during the life of the project making the plan a key management and commercial tool, very much like the programme under an ECC contract.

Term Services Contract



Similar reasons for non-acceptanceSame timescales in which programme has to be acceptedSame requirement to update and revise the programme

Same timescale intervals in which the Consultant has to submit revised programmes

Same sanctions apply until first programme submitted showing the information the contract requires (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 Dateplanned DeliveryDates which to Provide the Goods the Supplier needs

access to Purchaser s premisesacceptancesplant and materials and other things to be provided by the Purchaser

Dates when Supplier plans to carry out factory inspection tests or inspectionsOther information which the Goods Information requires to be shown on a programme (such as float, TRA etc)

Supply Contract



Similar reasons for non-acceptance

Same timescales in which programme has to be accepted

Same requirement to update and revise the programmeSame timescale intervals in which the Supplier has to submit programmes

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

Supply Contract


ECSC (Engineering and Construction Short Contract)ECSS (Engineering and Construction Short Subcontract)TSSC (Term Service Short Contract)SSC (Short Supply Contract)

Short Forms of Contract Programme Requirements:


Short forms of contract do not mandate the level of detail and requirement of the programme the same way that the fuller versions do, hence the long list within clause 31.2 does not existHowever, it states that the programme requirements are as per the Works Information, so you need to dictate the programme requirements within the Works Information. This could be to the full detail that the main contract requires if it is deemed suitable/ necessary for a given project.

Short forms of contract



The NEC suite of contracts all focus on programme, with the regular accepted programme becoming a key driver both operationally and commercially

Could be seen as quite onerous in terms of what should be included within a compliant programme and the requirement to regularly update. However, the contract is simply instilling good practise project management and 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 give reasons for not accepting so that both parties know where they stand.

Accepted programme becomes the revised contract programme and the new baseline to measure future

progress/change against.

Summary of programming under NEC contracts

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