NEC survey for use in Hydropower

Contacts for hydropower

 

Richard Patterson of Mott MacDonald and Warwick Fergusson of Transpower NZ are presenting at Hydro 2015. The paper is on 'NEC contracts - good for hydropower?

 

To inform the paper they has set up a short survey to find out what hydropower people need from their contracts and the extent to which their current contracts provide this. The link to the survey was in July's International Hydro Association newsletter.

 

If you are in the hydro sector, whether or not you have used NEC, please find the five minutes it will take to complete it.

 

Many thanks.

 

http://bit.ly/iha-newsletter-31-july

 

How important is the language we use in communicating?

Most NEC3 contracts require us to communicate in a form that can be 'read, copied and recorded' - see clause 13.1 of the NEC3 ECC. But what sort of language should we actually use in such communications, and when we are in say a risk reduction meeting, what language should we use there? I say this, following on from earlier posts today, that often I hear people using I/you quite prolifically rather than we/us. What state of mind do you think that creates? If somebody in a risk reduction meeting starts finger pointing at you saying 'You have messed up, it's your risk/fault, what are you going to do about it?' then funnily enough you may not be quite as engaging and may not be quite as creative/helpful as the pointing person hopes! To neutralise this as best you can, why not try (at the same risk reduction meeting)....'We have a problem here [explain] so what do we think we can do to avoid or reduce the effects of this matter'? Suddenly you've given yourself a chance to tease some good ideas out of those in attendance and can hopefully come up with something really good out of this and action it. Or is this a bit fluffy and the 'bloke' within many of us wants to make sure everyone knows who is the boss?! Which approach do you think is most likely to best minimise the time/cost effects of problems: A. I/you, or B. We/us?

Q. Do you issue or raise an early warning?

A. Neither of these. Assuming this is NEC3 ECC, clause 16.1 requires the Project Manager (PM) or the Contractor to give an early warning by 'notifying' the other as soon as blah blah. All either party needs to do is fill in a very simple communication form (such as those produced by NEC) that says eg 'Under clause 16.1 I notify you that a Subcontractor may be going insolvent/a supplier may be delivering some key Plant and Materials later than promised/the Employer has requested we change the permanent fencing layout (yet again!)/a protest group has threatened to invade the Site....' and so on. The contract does not ask either party to say anything more than stating the matter itself that is giving concern - it does not say fix it, or somehow rank it, or submit proposals or anything other than what is it, and this needs to be properly communicated via a notification. Use the NEC Project Manager's notification form or the Contractor's notification form. PMN or CN if you like acronyms. Simples. So again, this is about properly and closely following what the contract requires you to do, no more, no less. Follow the language. Follow the processes.

Q. Do you raise or instruct a compensation event?

A. Neither of these. The answer is that you notify a compensation event (CE). Most CE's arise (in an ECC contract) because the Project Manager (PM) has instructed a change to the Works Information (WI). Hence why we call this a PMI, a Project Manager's instruction. In most instances this will be a CE that has an effect on the Prices (the lump sum or the target, etc) and so I think we try to shortcut things even further by using the phrase 'The PM instructed a CE' - what we really mean is that the PM gave an instruction which changed the WI and this instruction is also a CE which may or may not have an effect on the Prices/planned Completion. We don't seem to like the latter as it's too long so often this is turned into the former. But the former is wrong, does not accord with the contract and gets confusing. I also want people to stay inside the contract, following its provisions, that's a far better place to be than operating outside of the contract. So, the logic is.... 1. The PM gives an instruction to change the WI (clause 14.3) & let's ignore the possible obligation to notify an early warning before this! 2. Communications are in a form that can be read, copied and recorded (clause 13.1) 3. The Contractor must obey such instructions (clause 27.3) 4. The Contractor Provides the Works in accordance with the WI (clause 20.1) 5. Clause 13.7 demands that notifications which this contract requires are communicated separately from other communications 6. That brings us nicely on to the CE process. Assuming neither bullet of 60.1(1) applies, a CE arises where the PM gives an instruction to change the WI. 7. As this CE has arisen due to the PM giving an instruction then then PM should notify the CE to the Contractor at the time of the communication (ie when the PMI was given). 8. If the PM does not notify this CE (which is a bit naughty but there you go!) then the obligation falls to the Contractor to notify this CE to the PM (clause 61.3) and this will not fall foul of the time bar rule in clause 61.3 as it should have been notified by the PM but was not. So I've stretched 'The PM instructed a CE' into 8 parts but that's important. Parts 1-4 make sure the PM properly keeps the WI up to date and reflects the Employer's requirements. Part 5 gives us a basic rule that means administration of communications becomes that bit easier, although of course more communications result from this (maybe that's another thread another time...). Part 6-8 deal with the basics of getting the CE acknowledged in principle, and away you go from there. So what's the moral here? It is to follow the wording of the contract, nothing exciting there, but it is important to make sure you do what the contract requires you to do, nothing more, nothing less.