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The importance of the programme in the NEC contract is emphasised in Cl.50.3, where it provides the Project Manager with powers to with-hold 25% of the price of work done to date if the Contractor does not provide a programme in accordance with Cl.31.
However one of the biggest issues that Contractor’s planners commonly seem to face is that Client Project Manager does not accept or is mute with regards to acceptance of a submitted revised programme or that an ‘accepted programme’ is one of the key fundamental tools on an ECC contract.
In many cases the Client Project Manager seems ignorant that under Clause 31.3 that he/she has to accept or not accept a programme within two weeks of submission. This has to be notified separately to the Contractor (Clause 13.7) and give reasons why if the response is non-acceptance.
If the Project Manager chooses not accept for any other reason, then by default that would be a compensation event under 60.1(9). What this means is that the Client Project Manager has to accept, or not accept (and have a reason for not accepting under the contract otherwise it will be a compensation event).
It is important for the Contractor though to chase, chase, and chase this explicit approval as the “Contract Programme” forms the baseline from which to measure future progress and the basis of Early Warnings raised (under Clause 16 of the ECC contract).
As NEC contract Cl.62.2 requires the time effect of a Compensation Event to be measured against the ‘Accepted Programme’ it also impacts the size of Change Orders to the contractor in terms of time and prices.
Whether a programme has been accepted or not is not, the Contractor cannot refuse to work until such time that the programme is accepted. However it is important to recognise that if the Client Project Manager does not respond within two weeks of being issued then the programme is NOT deemed accepted.
That under NEC the Contract Programme is deemed a key tool for successful project management and often considered ‘the heart of the contract’ is emphasised by Cl.31.2 –dealing with the preparation of the Contract Programme – which is the longest clause in NEC. However despite Cl.31.2 prescribing a long list of requirements to be taken into account, including the need to have all activities fully logic linked and resource/cost loading most common complaints is that the submitted Contractor’s programme has insufficient detail in accordance with 31.2 of the contract.
Further emphasis that under NEC the Contract Programme is deemed a key tool for successful project management is underlined by the fact that the maximum period between programme submissions that employers request on most NEC contracts is four weeks, which means that all parties have to agree the true state of play at that point in time.
“Despite the best intentions of NEC, in the real-world however a Contractor may have their programmes rejected for dubious ‘strategic’ reasons.”
It is because the Client Project Manager being able to take a full 2 weeks before responding to a contractor whether a programme is accepted or not and that the during this time there’s a lot of change that frequently the “contract programme” has a Data Date one month in arrears and frequently does not reflect the most recent developments and change requests. Ironically this is counter the NEC’s main purpose that the regular accepted programme becomes a live real management tool reflecting all the activities at any one point in time.
The impact on Change Management if ‘Programme Acceptance’ is not achieved
Even though the Contract Programme may be rejected the Contractor may continue to use their non-accepted programme for delivery of works, including managing Change Orders. However the lack of programme acceptance though WILL affect the time and cost assessments of the effect of change, as this is taken out of the Contractor’s hands and given to the Project Manager under Cl.64 of the contract.
“It is important to remember that the programme requirements under the NEC contract are the minimum required and you can always do more.”
It should be noted that Clause 32.1 only explicitly requires the effects of implemented compensation events to be shown (implemented means quotation accepted or Project Manager’s assessment carried out). Subsequent programme resubmissions and the project management review process to get to an Accepted Programme are prescribed in the same NEC.
That the Project Manager’s acceptance is significant under the contract creates some resistance to accepting the programme as the Project Manager feels that they are “signing their life away” every time they accepts a programme and indemnifying the Contractor. However this is not true, as Clause (14.1) states that acceptance of any does not transfer liability away from the contractor to comply with their obligations. So for example a reduction in the Employer’s document review period does not by default overwrite the original works information to produce robust documentation in the first place.
Here is a summary of the key NEC timescales that PMOs should measure whether they adhere to.
Measure your PMOs and Sub-Contractors against these timescales to save your company penalties.
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