Preliminaries - (a few!) watch it points.....

Many times we are asked, "where's the prelims (or preliminaries) in NEC3 Contracts?" I would say, actually what are these and why do they even exist? These seem to have developed over the years in the building industry and they seem to me to be a complete mish mash of technical matters, pricing matters, conditions of contract, constraints, pricing notes and on an on. NEC3 Contracts do not provide for documents called 'Prelimaries' or 'Prelims' but most of the matters within them are generally required, but on the correct documentation/place.

So, with some careful thought, you can use the information but I would not incorporate such a document as such into tender documents.  Here's a few reasons why, looking at the most recent 'Sample NEC Preliminaries' I came across in relation to using the NEC3 Engineering and Construction Contract (ECC):

1. Project particulars referred to - isn't this exactly the function of the ECC Contract Data except we get people such as 'client' thrown in and the Principal Contractor and CDM Co-ordinator (shouldn't that be dealt with by separate communication, as required by statute) and the beloved 'clerk of works'. Of course I know what is sort of referred to but all we are doing is creating ambiguity because we are lazy.

2. Terms like tender and contract are used ad hoc, and tendering rules are thrown in. Surely you should never accidentally or deliberately bring into a contract document some tendering rules/terms?

3.  Terms like the Site/existing buildings - isn't that the purpose of the Site Information, in the main? If the Site Information merely points to the Preliminaries as does the Works Information, there's a real risk the two will become one and you've a real problem on your hands. The contract points to the right document for the right reason, to lug everything in one pot is fraught with danger.

4. Suddenly in this particular document was thrown in details of/reference to the NEC3 Engineering and Construction Short Contract. I'll leave you to wonder why, what ....!

5. Employer and Contractor, amongst others, are normalised not italicised so are they different to the identified equivalents?

6. Within the Preliminaries was reference to the Specification which in turn includes Preliminaries. No, I don't get that either.

7. A schedule of rates was asked for to be included - why, how will this be used, where are the changes to the contract to explain what/why etc? There is then a standard price book referred to as being the basis for 'valuation' - I can see some of you shaking your head now....

8. Provisional Sums - you knew they had to feature! NEC3 Contracts make no provision at all for provisional sums, so how can they just be thrown in?

9. And so on, you get the drift and this is just a watch it note!

Take care, think about the quality of documentation you need to prepare, use the like of the ECC Works Information as a template, do not just used random so called 'Sample NEC Preliminaries' without a great deal of thought and challenge those who produce these in the first place. Then maybe we start to produce better quality tender documentation.....

Rob

NEC student research

Dear all,

Another student survey if you could spare some time please, this one being iphone compatible so easy then......

Regards,
Rob

https://www.surveymonkey.com/s/NEC_vs_other_contracts

NEC Student Research

Hi all,
Another student is doing an NEC dissertation. In the student's own words...

Is the Compensation Event Process an effective means of managing the impact of change during construction projects?

I am completing structured research and I wish to collect qualitative through a survey questionnaire which will be used to form the basis of a dissertation for a Masters Degree in Construction Business & Project Management through the University of Ulster at Jordanstown. Inefficiencies within the Construction Industry are well documented and project failures, with cost and time overruns, continue to fuel the poor image of construction as a profession.

It is suggested that Change is inevitable on construction projects, and whilst change can interrupt the flow of work and cause time and cost overrun, change orders provide an essential mechanism for ensuring the client’s needs are satisfied throughout the project and to respond effectively to errors and/or omissions in design, site conditions, construction methods, the external environment and contract documents.

Therefore, the means by which change is managed is critical to project success, in terms of defining cost and time performance. The title of my study is:

‘A critical analysis of whether the NEC3 Compensation event process provides Project Managers with an effective means of managing the impact of change during construction projects’.

This research aims to establish whether the NEC3 Compensation Event process, in practice, is an effective means of evaluating the impact of change in construction projects.

Please click on the link below to register and complete the survey.

http://www.quenshassociates.com/survey/index.php?sid=41521&newtest=Y&lang=en

SMM, NRM & NEC3 Contracts

Whilst on the subject on BoQs (ps, just how many projects these days use BoQs I wonder?!) RICS has fairly recently replaced SMM with the New Rules of Measurement (NRM), which is a toolkit for cost management. The attempt is to bring consistency to the cost management of construction and maintenance work, giving surveyors a set of rules for measuring and capturing cost data. Of course, this is aimed at the building industry (I'm not sure if it is worldwide or just UK, would be a shame if just the latter).

The good news is that this seems to have been written on the basis of contract neutrality so can be used with NEC3 Contracts. Care would have to be taken though to fully understand the new rules as they continue to cover traditional (and in my opinion completely outdated) practices of things like dayworks and provisional sums. The only use of BoQs with NEC3 Contracts are Options B&D of both NEC3 ECC & ECS - these both envisage remeasurement of an approximate BoQ. NRM seems to provide for firm and approximate BoQs, firm BoQs are not provided for in NEC3 Contracts.

In principle, with some care, the NRM should be readily usable with those NEC3 Contracts that support approximate BoQs.

Any other thoughts, comments, differences of opinion, someone extolling the virtues of dayworks (!) would be good.

Rob

CESMM4 & NEC3

Just a note that the Civil Engineering Standard Method of Measurement has been updated from CESMM3 to CESMM4. For the first time it has been written to be contract neutral and also brings the method into line with changes in industry practices and extends its usages into all new areas. Sample pages available at icevirtuallibrary.com/cesmm. The most appropriate NEC3 Contracts this would be used in are Options B & D of NEC3 ECC & ECS. Happy BoQ preparing....

IUK Infrastructure Cost Review 2012

In case you missed this, the IUK 2012 cost review has been launched. Interested reading, some good references and the ship seems still to be sailing in what I would call the right direction - towards better collaboration/more efficiency/less waste, or at least that's what the radar suggests! Some good references to NEC and good opportunities for NEC to be at the heart of much of what IUK wish to achieve. Enjoy....

Rob

http://www.hm-treasury.gov.uk/d/iuk_cost_review_report2012_230412.pdf

IACCM 2011 top terms in negotiation

In its 10^th annual survey of the most frequently negotiated terms and conditions, IACCM once more reveals that business contracts are constraining the value that can be achieved from high-performing relationships. For the first time, the study also identifies the most common sources of failure in contract outcomes and this indicates the potential value that could come from a robust contracting strategy and competence. 

Limitation of liability is sadly still nr 1 followed by indemnification, and there's a noticeable trend back towards the penalty type provisions. If there was any way of measuring roughly how much effort went into such negotiations we would probably be amazed and actually do something about it. Maybe next report IACCM?

This is a very interesting read, the only slight downside is you have to register to get the report.  The link is below.

Rob

http://www.iaccm.com/library/?id=3958#top