ECC Works Information Site Information
X12 Introduces Partnering Information, Clients Objectives and the Schedule of Core Group Members. Where X12 is used, X20 the KPI clause will not apply as X12 includes its own KPIs.
The NEC is a bi-party contract with strong interaction between the defined roles.
It should be noted that there is clear definition of the roles and activities required of each party, however minimal activity does not always denote minimal responsibility. The main roles outlined within the contract are as follows:
The ECC’s Employer
The Employer is defined as an organisation and not an individual. This is common practice and avoids issues when individuals move on within an organisation the liability is kept with the organisation as it is the organisation’s ultimate responsibility. The Employer’s responsibilities as defined in the contract are limited and are primarily involved with Compensation Events and Termination.
The ECC’s Contractor
Defined as an organisation and team responsible for the project. The Contractor’s responsibilities are outlined in Clause 2 of the contract.
The ECC’s Supervisor
Defined as an individual or a team responsible for the Contractor’s compliance with the Works Information. The Supervisor’s main responsibilities are outlined in Clause 4 and Clause 7 of the contract. This is the closest relationship to the traditional Clerk of Works role. It should be noted that there are some changes in duties between the two and the issuing of instructions from the Supervisor is limited; this is to ensure clarity of instruction and intentions and that the Project Manager is aware of all issues.
The ECC’s Others
The engagement and interaction with the ‘Others’ is an underused element of the contract. Its intentions are designed to significantly improve the traditional JCT third party engagement, which commonly leads to variations and extensions of time.
The ‘Others’ are defined in Clause 11.2(10). It is the Contractor’s responsibility to work with them in order to deliver the works. Requirements and constraints should be detailed in Works Information and included in the Contractor’s programme.
Consideration of ‘Others’ by the Employer and Project Manager when drafting Works Information can lead to significantly improved project delivery where multiple parties will be operating on the same site.
The ECC’s Project Manager
The NEC contract has no Contract Administrator, no Clerk of Works and no Architect. As such, the Project Manager is the focal point of the contract. It is the Project Manager’s duty to manage the contract on behalf of the Employer with the intention of achieving the Employer’s objectives with regard to budget, programme, quality/end product brief.
The role of Project Manager is commonly assumed to be an individual. In reality, the role can be undertaken by a multi-disciplinary team. The Contract Data Part 1 should identify whether this role is undertaken by an individual or a team. Details of roles and responsibilities of each member of the team should be clearly outlined to avoid confusion on the contractor’s behalf. Even in the event of a team fulfilling the role of Project Manager, it is still recommended to have an overall leader who is aware of every aspect of his / her team’s activities. This allows the fulfilment of the NEC’s goal to have good leadership. Whoever is originally stipulated as being the ‘Project Manager’ may be altered accordingly at a later date by the Employer or Project Manager. When changes such as this are made the contractor should be made aware of the details of the change.
The Project Manager’s duties also include changing the Works Information and using his/her expertise and construction judgement.
The Project Manager should be on site regularly and be aware of progress, including any changes to price, defects and Compensation Events.
Attempting to manage too many NEC projects as a Project Manager can lead to a reduction of the effectiveness of the role. The Project Manager’s role is designed to be highly involved in the project; ‘on-the-fence’ Project Management can lead to later problems and adversely affect cost and control of the project.
The Project Manager should proactively control the works whilst monitoring progress, approving programmes and seeking quotations for acceleration. It is the Project Manager who issues instructions; reviews and accept design and method statements; accept subcontractors; assesses Compensation Events; maintains the Risk Register; and assesses amounts due for payment.
The contract is set up to incentivise Project Managers to respond on time – a failure to respond can result in a response being deemed accepted. NEC is different in its approach to incentivisation of parties in as much as it aims to provide a carrot and stick to both sides, the focus being on the most effective delivery of the Employer’s requirements, ie the Works Information rather than aiming to provide benefit to either party over the other. This can be seen elsewhere with the contra proferentem principles of error and ambiguity management.
The areas that the Project Manager is NOT involved in are: Supervisor’s duties, making payments and the act of termination.
Even in areas that are not under the direct control of the Project Manager, the individual or team responsible should still maintain an indirect awareness of the issues as this will be required to effectively manage the Compensation Event and programme control processes.
Design is issued on behalf of the Employer by the Project Manager, rather than issued by a designer designated in the contract. This has occasionally caused contention as the primary aim of this is to ensure impartiality of the Project Manager it is considered that the Project Manager control information issued to the contractor to ensure all are aware of instructions. This matches the NEC’s intention that the Project Manager and the contractor are active and aware of all design considerations and implications and able to proactively manage changes and compensation events.
Project Manager Duties
The NEC differs from traditional contracts by ensuring that the programme is a contractual document owned by the contractor rather than the Project Manager or Employer. The Project Manager’s duties are effectively in providing the start and finish dates required and any other interim key dates. The contractor’s duty is to provide an achievable programme for delivery of these which is subsequently approved by the Project Manager. The key priority of the Project Manager is to approve the programme within two weeks of issue; this ensures an accurate and reflective programme.
The approval of subcontractors should not be seen as an opportunity for the Project Manager to hold sway over who is selected, but as an opportunity to ensure the likelihood of the project achieving success through the selection of an able and appropriate supply chain. This approval process can be bypassed if the supply chain is employed under an NEC contract or the Project Manager has agreed not to use the approval process. In all cases common sense and a pragmatic approach is required by the Project Manager.
The NEC does not have a valuation process per se; the Project Manager has a duty to assess costs. This varies between the different forms of contract. In reality, the ability of a Project Manager to assess a contractor’s open-book costs without input from the contractor is questionable, therefore the contract allows for the contractor to offer up their assessment of costs and for the Project Manager to use this as a guide.
On an Option A form of contract, the Project Manager uses an assessment of the programme to determine the completed activities and, as such, the costs of work done to date.
A key duty of the Project Manager in this area is to ensure the review and control of costs through the disallowed cost process.
As with all commercial issues the Project Manager must be authorised by the Employer to fulfil the financial management role. The nature of the NEC, particularly in open book contracts, is such that the interim assessments reflect a forecast final account. The Project Manager has a limited period of time to review interim assessments and should therefore become comfortable with the requirements of Defined Costs and disallowed, creating an appropriately robust audit regime.
The parties should not underestimate the importance of the Early Warning process; its use should be considered as a precursor for avoiding Compensation Events, rather than a starting point for their instigation. Project Managers and contractors should consider a regular review of forthcoming activities as part of a proactive risk management approach, which incorporates Early Warning and programme control.
As with programme control, Project Managers should be timely with their review of Compensation Events to avoid changing or worsening of situations or a reduction of the options available. The use of ‘assumptions’ by the Project Manager to allow the interim assessment of Compensation Events, which is an effective way to maintain the flow of a contract whilst information is gathered that will ultimately form the basis of the final Compensation Event.