Make a decision.....

I often say there are no hiding places within NEC3 contracts for those with responsibilities to make decisions. What I mean is that the contracts demand lots of decisions to be taken and failure can have consequences. Those unable or not willing to make decisions will very soon cause a bottleneck, in any contract to be fair, but probably will surface more quickly in NEC contracts (which is a really good thing in my experience). For example, the Project Manager (PM) in the NEC3 Engineering and Construction Contract (ECC) has any number of decisions to make during the contract management stage:
- is the Contractor's design acceptable?
- is the event a compensation event?
- is the quotation for a compensation event prepared in accordance with the contract?
- does the work meet the Condition stated for the Key Date?
- and so on.

Lots of decisions, so (clients) make sure your ECC PM (or equivalent in other NEC3 contracts) is a competent decision maker. In a recent training course I was pointed to a quote from Theodore Roosevelt....

 

'In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.'

 

I couldn't locate the absolute source of this other than general reference in a Google search but this sums my point up brilliantly. Make sure you have available all the data, support, opinion etc to help you make that decision, then make it!

 

Happy deciding!

Using schedules of rates with NEC3 contracts

There's a number of occasions users have asked 'am I ok using a published schedule of rates with NEC3 contracts'? The sorts of questions are about using the SoR for:
- ECC for assessing compensation events (clause 63.14, if both Project Manager (PM) and Contractor agree),
- TSC or TSSC for use in/as the Price List,
- the quotation procedure when setting up the NEC Framework Contract.

The simple answer is yes(ish), the longer answer is really more of a 'watch it'. By this I mean take care to find out precisely what are in (or out) of the SoRs - do they include overheads & profit, financing charges, insurance premiums and the like? If they do, how are you going to work that through with things like the ECC Fee % taking care not to double up or leave something out. So read the front end of the published SoRs very carefully indeed to make sure you know the basis of the rates you wish now to use.

It would be good one day if all such published SoRs were neutrally drafted to enable them to be used by any standard form contract. Until then, take care!

Learn to love ECC clause 14.1....

...and the equivalent in other NEC3 contracts.

To remind us, the clause says "The Project Manager's or the Supervisor's acceptance of a communication from the Contractor or of his work does not change the Contractor's responsibility to Provide the Works or his liability for his design."

So the ECC  requires the Project Manager (PM) and Supervisor to accept various things at various times:
- the PM accepts the Contractor's design (clause 21.2)
- the PM accepts a submitted Contractor's programme (clause 31.3)
- tests may be accepted by the Supervisor as being required in the WI
and so on.

The contract uses 'acceptance' and not 'approval' (the latter being legally problematic of course) and basically is saying even if the PM accepts a Contractor's design, if the design later proves to be wrong the Contractor is still liable for his design. Nothing has changed through the acceptance.

I'm not suggesting for one minute therefore that PMs/Supervisors become cavalier but we've previously discussed people's reluctance to say yes but you have the whole weight of this clause behind you. Try to say yes, work with the Contractor to say yes, possibly even give them the slight benefit of the doubt and appreciate that, if there is a problem then the Contractor is still 100% responsible to Provide the Works and 100% responsible for any design the WI states he is to design. Then if there is a problem, roll your sleeves up and get stuck into helping him fix the problem.