NEC4: Programme

We conclude our NEC4 mini-series this week with a focus on the essential role that the programme plays in the performance and administration of NEC4 contracts. There are prescriptive requirements that set out the Contractor’s responsibility to prepare, update, and submit programmes, and the Project Manager’s responsibility to review and approve/reject programmes.

The Accepted Programme is an important management and measurement tool in the NEC4 contract and underpins the ‘spirit of mutual trust and cooperation’ obligation on both parties. It provides information showing who must do what and when, and it allows prompt and prospective time impact assessments to be included in compensation events. When used correctly, it avoids the need for complex and costly retrospective delay analysis.

We will outline some of the basics before touching on some common scenarios we find and give you some advice on how to deal with those situations.

The basics

The first Accepted Programme is either the one included in the Contract Data, or the programme submitted in accordance with clause 31.1 and subsequently accepted by the Project Manager in accordance with clause 31.3.

When submitting a programme for acceptance, the Contractor must comply with the requirement to include the following types of information: the starting date, access dates, Key Dates, planned Completion and the Completion Date; the order and timing of the Contractor’s operations and any work by the Client and Others; provisions for float and time risk allowances; when the Contractor requires things like access or acceptances; and statements on how the Contractor plans to do the work.

There are reasons why the Project Manager may not accept a programme, and these include that the programme is not practicable, does not show the information that the contract requires, does not represent the plans realistically, or does not comply with the Scope.

The Contractor can submit a revised programme for acceptance at any time they choose but must do so at intervals not longer than stated in the Contract Data.

Help required scenario 1: the Project Manager does not accept your programme

The most obvious, and sometimes simplest, way of managing this issue is to ensure that the programme you submit is compliant with the requirements of the contract and, most particularly, you address all the reasons the Project Manager might not accept the programme.

If you believe that your programme is compliant, then communication is vital. You should arrange a meeting with the Project Manager to go through the specific reasons for not accepting the programme. Deal with these one by one and conclude an agreed action for each issue, then document those conclusions in a communication to the Project Manager.

Whilst you should try and resolve these issues by the time your next programme is submitted, don’t take your eye off the ball and miss your next programme submission. When this happens, it can make an already challenging and complicated situation even more challenging and complex.

If you find yourself in this situation, intense focus is often the only way you will get through it. You will find yourself up against a Project Manager who is likely to know how to work the contract to their advantage, so don’t underestimate what is needed. Keeping up with the requirements can be time-consuming, so allocate suitable and sufficient resources.

Help required scenario 2: you are not sure how to time-impact a compensation event

Even if you have an Accepted Programme to prospectively time-impact a compensation event, the task of doing this is not always straightforward.

It is stated, at clause 63.5, that “a delay to the Completion Date is assessed as the length of time that, due to the compensation event, planned Completion is later than planned Completion as shown on the Accepted Programme current at the dividing date.”. The dividing date is the date of the Project Manager’s Instruction (PMI), or the Notification of Compensation Event (NCE) issued by the Contractor. The Accepted Programme current at the dividing date is to be used for any time impact analysis.

Possibly the most challenging aspect of time impacting a compensation event is the requirement to make the assessment prospectively; therefore, the assessment can be part actualised impact and part forecast impact. You can’t sit and wait, understand the actual impact, and make your assessment on that basis. You have to be forthcoming and make commitments about what you will do and state what you need from the Client to achieve those dates.

Do not underestimate this task because if the compensation event is implemented, then you are stuck with your assessment, for good or for bad. It requires a mindset shift that can be difficult to make.

Help required scenario 3: we have not maintained the programme

There are many reasons you may find yourself in this situation; maybe you didn’t have the resources or maybe you are not familiar with the contract and didn’t know. The obvious consequence when this occurs is you struggle to demonstrate your entitlement to an extension of time, and you are exposed to damages and/or cannot recover your costs.

The solution here will depend upon the circumstances and what has/hasn't been done. If you are facing financial consequences, then you should procure specialist help and seek to address the situation without further delay.

Final Reflections

This is a wide subject area and could be a whole article series in its own right.

The financial consequences of not properly planning and programming a project to be performed under an NEC4 contract can be severe. The best way to avoid this is to take early action, invest in the right resources, and comply with the requirements of the contract.

That said, challenges do occur, and if you find yourself in one of the above scenarios, or a multitude of other possible scenarios, then be assured that you are probably in the majority. An investment in experienced support can help guide you out of the situation and mitigate the impact on your financial position.

In next week’s article, we will start a new mini-series focused on quantum expert witness evidence.

Keep an eye out for that, and in the meantime, enjoy the rest of your week!

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