ECC Clause 32.1 – Revising the Programme

This clause requires that all subsequent programmes include actual progress achieved on each operation and effect upon remaining work, , how Contractor plans to deal with delays and correct notified defects and any other changes that the Contractor proposes to make.

NEC4 has deleted the requirement stated in NEC3 to also show on a revised programme the effect of implemented compensation events. The reason for this was that under NEC3, some people took that to mean you can only therefore show the effect of implemented compensation events, and should not show the effect of non-implemented compensation events. That was not the intent, and is actually nonsensical, as you have to show the effect of a non-implemented compensation event if it is already affecting the remaining work. The key is that it can only move planned Completion at that point, and Completion Date can only ever move as and when the Compensation Event becomes implemented.  NEC3 requirement to show the “effects of implemented compensation events” was simply referring to if a compensation event has been implemented within the period, then Completion Date can now be moved by the agreed amount.

Put much more simply, the Contractor should update their programme to reflect the true reality of how they now perceive that they intend to carry out all remaining works. Any factor that has changed the logic or duration of activities has to be reflected. A very simple test when updating a programme is to run a filter of the following week’s work that it shows are planned to be carried out. Are those the activities that are really intended to be done? If not, then which ever way you look at it that can not be the correct contract programme issued for acceptance. The programme should demonstrate the reality of what you know at any given point in time. Sure – it may be out of date as something has changed soon after you issued it, but you have to draw a line somewhere!

Whatever stage of the compensation event cycle an event is at, one needs to consider how this is to be demonstrated on any programme issued for acceptance. If a Project Manager notifies a compensation event or agrees with the Contractor’s notification, they request a quotation, which should include any change to the prices and any delay to the Completion Date(see clause 62.2). The Project Manager could request for this quotation under clause 61.1 for which the Contractor should now be proceeding with those works. Alternatively, the Project Manager could instead request a quotation under 62.1 (alternative quotations) where there could be more than one solution to the problem but with a likely different balance between cost and delay. The last option for the Project Manager would be a request for the quotation under 65.1 (proposed instructions) in which case the Contractor will not start to execute the works as the Project Manager will decide upon receipt of the quotation whether or not they want to proceed with this particular proposed instruction.

However, a quotation request under 61.1(along with an instruction where there is a change to the works in the first place under clause 14.3) is actually the trigger for the Contractor to proceed with the works, i.e. get on with it, safe in the knowledge that the contract will ensure suitable recovery to the Contractor for that event. The Contractor does not need to (and should not) wait for the quotation to be accepted before doing anything. If the compensation event needs materials that, say, have a six week lead in, it would be detrimental to the project if Contractor and Project Manager waited for the quotation to be agreed before ordering the pipework. Contractors might question why they would proceed with something that they do not know ultimately how much they will get paid for? The idea is that the contract ensures that the Contractor is due appropriate compensation for the event and so should not lose out financially for an event that they had not and could not have allowed for in the first place. It is quite important to understand these processes as to what should or should not be shown on a programme at any point in time.

Some practitioners within the construction industry have previously stated that the contract requires you to show implemented compensation events on the programme and therefore you do not show non-implemented compensation events. The NEC4 amendment will hopefully make this more clear where they have deleted the line that might have been interpreted that only implemented compensation events should be shown on a revised programme. However, as with any contract it is important to take into account other contract clauses and the contract as a whole when interpreting its meaning and contractual obligations. Very quickly this interpretation of only showing implemented compensation events is exposed as being fundamentally wrong and not what the contract intends – and would in fact be a reason not to accept a programme if it did not include events that were already affecting other activities on the programme.