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?

An anonymous question from a civil servant on the possibility of advanced payments.....

I've been asked to ask this question anonymously from a civil servant. Here's your chance supply chain members to raise clients' eyebrows and to try and bring about massive change in payment practice - from negative cashflow to positive cashflow, and please tell all of the potential savings/positive behavioural change and so on............

What commercial benefits would we (clients) gain if we used advance payrments on projects and would this have any challenges to NEC3 contracts? If money was paid up front a project through a project bank account would it interest you? Particularly would like replies from Tier 2 suppliers and consultants?

Just a thought on z clauses......

Having reviewed a few tender documents recently and the horrors of z clauses within them I was thinking just how much the z clause industry is costing the economy? How much time/cost is involved in preparing (hashing?) the z clauses, which passes to x tenderers to their advisers then all of their suppliers and tier 2 contractors and there advisers and on and on and on......The cost must be horrific and to what end? Nobody says NEC3 contracts are perfect and in an unamended form will always address all client's needs, but one document I reviewed recently had 40+ pages of these things, even including a z clause that deleted a secondary Option (rather than just not select it in the Contract Data) - who had that brainwave? Do you really have the right starting point when you end up with amends bigger than the original contract? Do advisers actually listen to how their clients wish to do business and ensure that their requirement is met, or do advisers tinker for their own ends? And what does all of this cost the taxpayer I wonder in public sector contracts?

So here's a (brave) thought for the second half of 2015.....

Clients about to engage advisers to write reams of z clauses.....stop. Don't do it. Leave the contract as is, give half of the money you would have paid the advisers to charity and invest the other half in making sure the Works Information (for ECC, Scope etc for other NEC3 contracts) is a quite brilliant document. This will lead to better behaviour, lower tender costs, sensible contract management and a better industry.....who's first up to give this a real go and let us know how you get on?!

Z clauses...thinking about them from a different angle (part I the mischief)

I think I must be getting punch drunk not only on z clause discussions but on similar themes too. Many discussions are along these lines....

'We need to include a z clause for this particular bit of legislation.
Why?
Because we need to be seen to take it seriously (and of course they mean to take it seriously)
But how and why will a z clause saying you have to do what you have to do because statute says so make any difference at all in your contract?
Silence.
We just need to include this in our contract'

So in this line of questioning (where if you keep asking why you may just root out the mischief) we failed to discover the particular aspect of a piece of legislation for which there may not be a contractual remedy to run alongside some other remedy available to that party. If we could uncover that particular mischief then we can get our heads around the problem and decide a sensible way forward. Just randomly pointing to something in the hope everything will work out just fine is naïve at best.
So this note, part I, is about actually establishing the mischief you are trying to decide whether or not you need to contractually (or otherwise) address.

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!

Should the contract stay in the bottom drawer?

You must have heard this saying before and I think, with traditional contracts, there was some sense to this. Most standard form contracts are drafted quite negatively and seem to expect failure...if you do this wrong, this is how hard I will kick you.....not quite drafted like that but you get my drift!

I think NEC3 contracts are different. I think we should regard NEC3 contracts as a sensible tool to help parties solve problems or exploit joint opportunities. So rather than roll them up and bash the Contractor over the head, why not have them out on the table, well thumbed and use them to create some good outcomes for all. And don't be afraid to quote clauses and stay inside the contract; the more we veer away from the contract the more likely we end up in someone else's playground, who will love your attendance!

Thoughts?

Why aren't we collaborative by nature?

I was just watching a webinar on collaboration. It's good to see modern day emphasis on collaboration, working together, sharing risk, joint problem solving and so on. Tools like NEC3 contracts, BIM and the incredible pace of technology can only help reach whatever goal we have in mind. But when did we decide not to be collaborative? Does this trace back to our outdated social class system? Are we still dogged by professional snobbery?

From my observations of the UK construction industry in particular, it has been incredibly painful to watch people be as non-collaborative as they can possibly get away with. This must have had a huge negative implication on people. But how long will it actually take to re-shape such a fragmented industry to allow a huge and genuine cultural change? Any thoughts?

Adjudication reports

I'm not sure if we've shared this before but those parties contemplating adjudication as a means of formal dispute resolution might like to quickly have a look at this service provided by the Glasgow Caledonian University.

http://www.gcu.ac.uk/ebe/businessservices/adjudicationreports/

The Adjudication Reporting Centre reports on the progress of adjudication in the UK. These reports examine trends in the number of adjudication nominations and on various aspects of the adjudication process.  For use by the construction and property industries, these reports contain data supplied by the Adjudicator Nominating Bodies (ANBs) and by adjudicators directly.

Whilst there is no particular reference to NEC, inevitably some of the adjudication references will be on NEC Contracts so it's good to have some sort of idea of the number of referrals, the trend of successful parties, primary subjects of the disputes, time limit compliance, and so on. Quite interesting!

Challenge one another

My observations of our extremely fragmented industry is that there is an incredible amount of waste that plagues us, holding us back at every opportunity. In our slow and windy road towards integration, or at least better co-operation and collaboration, why not helpfully challenge one another’s’ assumptions, plans and so on? Neither the buying nor selling side know everything there is to know about themselves, let alone each other, so why not challenge and therefore perhaps better understand and contribute to a more successful outcome? For example, from Contractor to PM:

• Why have this particular constraint in place and will it be necessary to retain it for the duration of the contract?
• Why specify this type of product when a far more cost-effective whole life solution is available?
• We note access to this part of the Site is delayed, can we help to bring this forward at all?

From PM to Contractor:

• Why are you commencing this particular activity at that time of year?
• Why is the productivity of this Equipment or gang so low?
• On your design of xxx, why did you opt for that particular solution?

And so on. Challenge each other, learn, contribute, actually try and shape a more informed industry.

The NEC jigsaw....

I recently read a comment telling how somebody had assembled all of the NEC pieces over time and had now understood how they all fit together. To me, that's a great way of thinking about NEC. There's no cross-referencing in an NEC Contract so you have to read it cover to cover and then appreciate how the pieces interact. NEC isn't exactly a 2 piece jigsaw, neither is it a 1000 piece work of complexity. Get your head around the key processes, learn how they work together, then you will see how the likes of early warnings have hardly any interaction with compensation events, despite users' perceptions, and so on.