NEC Option A

Still amazes me how people get caught out with NEC option A activity schedule-based contracts. Here are a few golden rules with regards to the activity schedule based on the ECC contract (Engineering and Construction Contract) but the same rules would apply for option A under the PSC, ECS and TSC contracts.

  • It is assumed that for the ECC the Contractor is producing the activity schedule and takes the risk in errors. If the client has produced an activity schedule for the Contractor to price – the Contractor needs to make sure it covers all the Works Information as errors will still be a Contractor risk
  • Contractor should break activity schedule down into suitable sized chunks as they only get paid upon completed items i.e. no 80% paid for an item that is 80% complete. It is 100% or nothing
  • Items on the activity schedule should relate to items on the programme. The ultimate step would be to cost load the programme so they are equally aligned and valuations can be done direct from the programme
  • A Contractor can propose a change to the activity schedule if it no longer reflects how they plan to do the works. This revised activity schedule needs to be accepted by the Project Manager before it becomes the new one. The only reasons to reject it would be 1) it is not in line with the programme, 2) the total does not add up to the Prices, or 3) costs are not evenly distributed.

For any more advise or assistance on option A or any form of NEC contract please use the “contact” tab on this website.