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.

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?

A survey on your thoughts on contracts

Dear all,

RICS are doing a short survey on your thoughts on the form of contract you use most. Unfortunately it's only available to members and you have to log into the RICS portal to get there but once you do search 'Contracts survey' and away you go....

Rob

Student dissertation on NEC

Dear all,

Please spare a bit of time to help this student in his research. In his own words....

I am currently doing my Masters degree in Construction Project Management. at University of Portsmouth and undertaking my research project on "efficiency of Early Warning System (EWS) used in NEC3 contracts to improve project risk management and overall project performance".

As a NEC3 user, I would be grateful if you spent few moments to answer the questionnaire. Your response on this survey
will be confidential and exculsively used by myself.

Regards,
Rob

https://docs.google.com/a/myport.ac.uk/forms/d/1ieNTkYMjlSLsr57oECu_mrNPpKC7LPkpQl50TyPztQY/edit