The NEC3 contract is based on the principle of proactive management of the contract and application of its provisions by all parties including the project manager and the contractor. Some of the more important of these are the regular submission of programmes for acceptance and compensation event notifications by the contractor.
‘Proactive management of a scheme’ means that when a contractor becomes aware of any event that could affect the accepted programme/date for completion and/or cost of a scheme’ they should promptly draw the attention of the project manager to the occurrence of any event. The same applies to project managers, in that they should notify the contractor. It is not acceptable for either party to not adhere to apply this principle, as it avoids/mitigates the risk of time and cost overruns as well as the possibility of misunderstandings and disputes arising.
To support the above, ProCure21+ has enhanced the NEC3 contract by including additional provisions in the ProCure21+ NEC3 contract template. The contract amendment provided for in Z Clause 16 places an emphasis on the contractor to continually monitor the accepted programme and progress of works and with the objective of encouraging the contractor’s staff to act positively and quickly to events as they happen and to ensure all parties are kept informed and engaged in their resolution at the time the events occur.
It is not acceptable practice under ProCure21+ to allow notification of events and possibly their implications, that may cost a client time or money, to be delayed by up to eight weeks before notification (notwithstanding the early warning notification requirement). Hence the requirement to notify an event, at the latest, within the current assessment period. This should result in a win/win situation for contractor and client in prompt identification of responsibilities and resolution of necessary actions, thereby addressing and resolving issues as they arise.
Contractors should also bear in mind that:
- an early warning of a possible event does not constitute a compensation event notification; and
- the identification of a risk on the risk register does not override the contract provisions that are required to be complied with in respect of compensation events (i.e., they must be followed if an identified risk occurs).
Where early warning is given, the contractor needs follow this up (even if the project manager does not) with a further discussion/risk reduction meeting request as soon as the early-warned event goes positive.
In respect of the time bars, it is important for all parties involved in a ProCure21+ to note that that any failure to adhere to the time bars may leave them exposed to the risks associated with such a failure, e.g. no compensation in respect of defined cost or time with imposition of delay damages.