ECC Clause 31.3 – Programme Acceptance

The accepted programme is key in agreeing the true state of play at any one point in time. The regularly submitted programmes will include contractors progress, their planned sequence of activities, as well as the effect that compensation events have at the time that they occur. The maximum period between programme submissions that employers request on most NEC contracts is four weeks, which means that at least every four weeks the intent of the parties is to agree the true state of play at that point in time. 

Whilst the acceptance of a programme does not change the Contractors responsibility to provide the works, it is the point at which to the best of both parties knowledge the Contractor has a realistic, practicable and fully inclusive programme. There are several reasons which a project manager has not to accept a programme, so by default an accepted programme should confirm that it is fully compliant to the numerous requirements under clause 31.2, as well as being realistic, practicable, showing the information the contract requires and complying with the works information. Once accepted, this will then represent the programme that the parties measure future progress and change against. 

The accepted programme should allow the accurate and least subjective true assessment of compensation events. The intent is to agree the time and cost effect (if any) of each event now, not later in the day when you can use hindsight and subjectivity. This should also decrease the resources required by both parties at the end of the project to try to ascertain the final account figure for the contractor, which for previous contracts has been very time consuming process for both parties. 

Under clause 31.3 the Project Manager 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. The four reasons under the contract are (together with some examples of reasons that would be valid not to accept): 

  1. Contractors plans shown are not practicable, e.g. multiple trades working in same vicinity which is not practical or safe, showing an activity starting prior to one finishing which is impossible, an activity duration is not achievable
  2. It does not show the information which this contract requires, e.g. does not show float or time risk allowance, does not show when the Contractor requires Employer free issue material, does not identify Key Dates as stated in the contract data for that project 
  3. It does not represent the Contractors plans realistically, e.g. programme shows Contractor doing works that have already been completed, a programme duration relies on eight operatives to achieve the output required of which the Contractor has only two operatives working on that activity, sequence shown on the programme is not how they are actually doing the work at the point in time that the programme was issued. 
  4. It does not comply with the works information, e.g. it does not show the full work scope of the project, something specifically required within the Works information has not been complied with. 

If the Project Manager chooses not accept for any other reason, then by default that would be a compensation event under 60.1(9).  

The two biggest issues that  seem to commonly occur in terms of programme are:

  1. Project Manager does not accept or is mute with regards to acceptance of a submitted revised programme
  2. Programme submitted by a Contractor has insufficient detail in accordance with 31.2 of the contract. 

Both scenarios result in the fact that a revised accepted programme is not in place for a period of time, and in some cases the life of the project. This completely undermines the intent of the contract and the systems it puts in place to ensure “best practice” project management of a project. It is only common sense that both parties would want to understand where the contract actually is in terms of financial/time implications at any point in time. 

In terms of point 1, a possible Contractor’s recourse is to notify an early warning if the period for reply to an issued programme, which should at least prompt a risk reduction meeting to discuss the issue. Within the industry there still appears to be too large a percentage of projects that do not have an Accepted Programme in place, or has an out of date programme with current works progressing to a significantly different sequence or timescale. It is everyone’s responsibility on a project to play their part to ensure that this does not happen. 

With regards to point 2 above, it has been voiced many times before that it is “impossible” for a Contractor to comply with clause 31.2 of the contract, but I do not agree with this. It is important to remember the intent of NEC, which is a stimulus to good management and looks to ensure that the programme becomes a tool that the whole project team can use, rather than merely being a retrospective or theoretical high level reporting tool. There is in fact nothing within clause 31.2 that a competent contractor would not or should not consider during part of the tender process in order to ascertain both anticipated cost and duration of a project. It is a case of taking that information and being able to show, monitor and develop it for the duration of the project.  

Whether a programme has been accepted or not is not a condition precedent for the Contractor proceeding with the works, i.e. Contractor can not refuse to work until such time that the programme is accepted. Equally important to recognise that if the Project Manager does not respond within two weeks of being issued then the programme is NOT deemed accepted. There are no deemed acceptance at all within the contract, other than three very specific conditions associated with the acceptance of compensation events quotations or notifications. 

The Accepted Programme becomes one of the key fundamental tools on an ECC contract. Both the Contractor and Project Manager have a key part to play in the programme acceptance process. As well as being a key management tool to which the Contractor intends to carry out the works, it will form the basis on which to assess any change and entitlement to the contractor in terms of time and prices. Unlike other forms of contract there is a contractual requirement to regularly update the programme, and once accepted, this will become the new “contract programme” which forms the baseline from which to measure future progress and change. 

Both Contractor and Project Manager have a key part to play in the programme acceptance process. The Contractor to start with has to provide the detail and the transparency of the programme in such a way that gives the Project Manager the understanding and the visibility of the updated sequence of work to allow it to be accepted. Equally the Project Manager has a duty to then consider whether the programme is acceptable or not and communicate this within the timescales of the contract. 

The Project Manager’s acceptance is significant under the contract, yet under clause (14.1) it is essential to know that he is not “signing his life away” every time he accepts a programme. Clause (14.1) states that acceptance of any communication does not transfer liability away from the contractor to comply with his obligations under the contract. The main reason for this is that if the Contractor deletes an element of work from the programme, or reduces one of the employer’s periods that is stated in the works information, the subsequent acceptance of the programme does not by default overwrite the original works information. The only person who can change the works information on a project is the Project Manager. Having said that, acceptance under the contract is important as it is recognition that from the Project Manager’s perspective that the programme is realistic, practicable and shows the information that the contract requires. 

The maximum timescales for response within the contract do not practically work on projects where there is significant change. The standard timescales within the contract have to be sensible as they cover the whole of the construction industry. They can not be too short as this will not work in numerous circumstances and it is not desirable to have to change them with Z clause amendments for each contract. However, on a practical level most timescales should be looked to be shortened by project teams for the benefit of all concerned, and the programme acceptance period for response within two weeks is no exception to this. Otherwise what can tend to happen is that a Project Manager will take the full two weeks before responding to a Contractor whether a programme is accepted or not. During that two weeks from when the Contractor submitted his update there is often a lot of change, and the danger is that the Project Manager feels that he subsequently can not accept the programme. The truth is that it should not matter how much change has happened since the programme was issued because by its nature this was not known about at the point it was issued. The Project Manager should be able to accept this programme as the “line in the sand” that at time of issue reflected the true representation of completed and programmed works at that point. Any subsequent change to any dates will be picked up and detailed in the next programme. Very quickly it is possible to get out of sync in getting programmes accepted and it becomes increasingly difficult to get back on track. This is a big problem to both parties as the Accepted Programme is the reference point for all compensation events and change that occur, and if there is not a recent Accepted Programme in place then commercially the parties are liable to be moving further apart in terms of commercial agreement as a result of these changes. 

Historically under other forms of contract the Project Manager has not had to accept any revisions of the programme during the life of the contract. However, it is very important that the Project Manager understands that under any NEC contract he has to accept, or not accept (and have a reason for not accepting under the contract otherwise it will be a compensation event). The Accepted Programme will be just as important to the Project Manager and the employer, as this will ensure that all parties understand the liability of for delays as they occur in relation to the planned Completion and Completion Date milestones. The regular Accepted Programme will become a live real management tool reflecting all the activities at any one point in time, and will not just be a programme that people stick up on a wall at the start of a project and forget about.