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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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