Quick Fire FAQ’s
16/09/24
Newsletter #24:
Welcome to the Instruct newsletter. NEC content fresher than that new car small!
This week we’re taking questions from the community and bundling them into a quick fire FAQ document. We are going to kick off with 5 quick wins:
Question 1
Who appoints the Project Manager? They are meant to be impartial but surely they must be biased to whoever appoints them?
Answer
The Client appoints the Project Manager, with clause 14.4 explaining how the Project Manager can be changed during the contract. This can create a bias, and it often does, but they should administer the contract independently. The Contractor can hold the Project Manager to account by stating the processes and procedures in the contract. If the Project Manager doesn’t act fairly and in accordance with the contract then it breaches clause 10.1 and could come to light if the Contractor take the Client to Adjudication.
Question 2
Why wouldn’t a Client want to take over the works before the Completion Date (Contract Data Part 1)
Answer
If the Client has stated they don’t want to take over the works before the Completion Date is probably because they have no benefit in doing so, and would prefer the site to remain the Contractor’s liability until the date when they need it (the Completion Date). For example if a Completion Date for a university project is set 2 weeks before the start of the academic year. The university may not want the responsibility of the works before then. This option is focussed around liability and who is responsible for the assets. Sometimes the Client just doesn’t need it any sooner!
Question 3
Why does the contract allow you to reduce the Price for Work Done to date by 25% if there isn’t a programme submitted?
Answer
Fundamentally the NEC contract lives and breathes by the programme, hence the need for clause 50.5. Without the programme compensation events must be assessed by the Project Manager and the Contractor loses the ability to formally submit their assessment. This can confuse and frustrate good administration of the contract by forcing the Project Manager to act. This clause ensure the Contractor values the programme and submit one when required.
Question 4
I’m a Contractor, what should I do if a compensation event occurs just before submission of the monthly programme?
Answer
Depending on the time between the compensation event occurring and submission of the programme, if you have time, impact the programme and submit it for acceptance. You may wish to include assumptions in the programme and disclose these to the Project Manager, but remember that the contract sets out the frequency of submission in the Contract Data. You should agree a date with the Project Manager which you can use as a ‘data date’, the data date will be the date at which the content of the programme was correct. This allows the Project Manager to see where you stopped updating the programme for reality. If you don’t have enough time to update the programme with the impact of the compensation event, just submit your latest update and note the compensation event impact has not been included due to proximity to the submission date.
Question 5
The Contractor has a team of people making submissions under the contract. Is this allowed? There is only one Project Manager, why isn’t there only one Contractor named?
Answer
The Contractor isn’t named as an individual. As such the Contractor can be represented by multiple individuals who all contribute, e.g. you could have quantity surveys submitting the application, quality inspectors submitting responses to Defects, planners submitting the programme, and a whole team managing compensation events!
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Reading Recommendations
To understand more about how to prepare and manage an NEC contract, the following guidance documents are available.
NEC4 Preparing an Engineering and Construction Contract
NEC4 Managing an Engineering and Construction Contract
Understanding the NEC4 ECC Contract
