Frequently asked questions around early warnings, which are a simple yet often misunderstood process within NEC contracts.
Who should notify an early warning?
Who should notify an early warning?
Either party can notify an early warning
If a subject has already been brought up in a meeting and/or recorded in minutes of meetings, does it still have to be formally notified as an early warning?
If a subject has already been brought up in a meeting and/or recorded in minutes of meetings, does it still have to be formally notified as an early warning?
Yes it still needs to be notified separately as any notification has to be communicated separately from any other form of communication (clause 13.7). Furthermore, if using a cloud-based system such as Cemar it needs to be notified as an early warning to then automatically feature on the Early Warning Register.
Who should update the Early Warning Register?
Who should update the Early Warning Register?
This is the role of the named Project Manager or anyone who they have formally delegated power to do so. The use of a cloud-based system such as Cemar will only allow someone with administration rights to update the register.
Does an early warning have to be notified before a compensation event can be notified?
Does an early warning have to be notified before a compensation event can be notified?
No, if something is already an issue then it can be notified as a compensation event. An early warning is something that might or could impact in some way and there is the chance to do something about it. A compensation event is something that is already known to be an issue or will be an issue and is not the Contractor’s risk under the contract. For a matter that has already been notified as a compensation event an early warning is not required.
Is the Early Warning Register the same as a traditional risk register?
Is the Early Warning Register the same as a traditional risk register?
No, which was why NEC4 changed the name from “Risk Register” to “Early Warning Register”. Traditional risk registers have numerous additional columns such as cost impact, programme impact, likelihood, severity, revised likelihood/severity post mitigation etc. The Early Warning Register only requires the description of the risk, and the action to be taken to avoid or mitigate the risk.
Should potential costs be included within an Early Warning notification?
Should potential costs be included within an Early Warning notification?
There is no need to include costs as the intent is to consider matters and actions that could be taken to avoid or minimise the impact, rather than focusing on who’s liability is it and what will the cost be.
How often should a regular early warning meetings be held?
How often should a regular early warning meetings be held?
They can either be instructed by either party at any time, or held at no longer interval than as stated in contract data part 1 (the early warning interval).
Who should attend an early warning meeting?
Who should attend an early warning meeting?
Anyone relevant who could help to decide what action should be taken to avoid or reduce the impact of the risk. This could include Contractors bringing representatives from their Subcontractor should that be useful.
Could/should an early warning ever be rejected?
Could/should an early warning ever be rejected?
There is nothing to “reject” about an early warning. If it is not something that could be an issue then it should be “closed” rather than “rejected”.
What is a Contractor fails to notify an early warning?
What is a Contractor fails to notify an early warning?
The lack of early warning could be taken into account when assessing a subsequent compensation event (clause 63.7), and/or if a cost reimbursable type contract then any cost incurred due to the lack of early warning could become a reason for a Disallowed Cost (clause 11.2(25)).
What matters should be notified as an early warning?
What matters should be notified as an early warning?
Anything that could increase the total of the Prices, delay Completion, delay meeting a Key Date or impair the performance of the works in use (or to simplify, anything that could impact time, cost or quality). An early warning may also be notified for any matter that could increase Contractor’s total cost.
How quickly should the first Early Warning Register be produced?
How quickly should the first Early Warning Register be produced?
Within one week of the starting date.
When should the first early warning meeting be held?
When should the first early warning meeting be held?
Within two weeks of the starting date.
What should happen at an early warning meeting?
What should happen at an early warning meeting?
All those who attend should co-operate in considering proposals for how the effects of early warnings can be reduced, seeking solutions that bring advantage to those who will be affected, deciding actions to be taken and who should take them, deciding which matters can be removed from the register or any different actions that need to be taken from those originally decided.
What should be the outcome of an early warning meeting?
What should be the outcome of an early warning meeting?
Attendees should leave the meeting clear on the actions to be taken and the register should be updated and reissued within one week of the meeting.
If any decision made and recorded on the early warning register needs a change to the Scope, is a separate instruction necessary or is it sufficient to just leave it recorded within the Early Warning Register?
If any decision made and recorded on the early warning register needs a change to the Scope, is a separate instruction necessary or is it sufficient to just leave it recorded within the Early Warning Register?
Yes, a separate instruction is necessary to change the Scope
When should an early warning be removed or closed on the register?
When should an early warning be removed or closed on the register?
When the matter is known will no longer be an issue or there are no further actions that could be made that would alter the outcome. It is recommended to “close” the matter on the register rather than “remove” it so the record of previous early warnings are still there but closed ones can be filtered out so that the open ones can be focused on at the next meeting.