July 10, 2020
Covid-19 pandemic: helping NEC users adapt to the ‘new normal’
The world and the construction industry are in the midst of a massive change. All NEC users are trying to understand how they will continue under the exceptional circumstances that the Covid-19 pandemic has forced upon them, and to develop a ‘new normal’.
The new normal is not just about how they work on site but also how they will travel to their places of work. Public transport rightly needs to be prioritised for those who cannot work from home, in particular those in the health service, providing essential services, people building and maintaining essential infrastructure projects and those working on construction sites for schools, hospitals and homes. The key thing is to keep all the workforce safe, and everyone has a duty of care to achieve this.
Construction response to Covid-19
While these are extraordinary times, I have been pleased and proud to see the collaborative approach NEC users and the industry have taken in responding to the Covid-19 pandemic. This has enabled the industry to continue to develop methods to work safely.
Contractual behaviour when things settle down will be crucial, and I believe that both NEC clients and contractors will need to continue to behave collaboratively to ensure projects are brought to a satisfactory outcome.
The Construction Leadership Council (CLC) recently set up a task force with national construction industry bodies to speak with one voice and act collaboratively alongside the government. It has delivered a range of outputs in a very short time, including
- advice on applying government guidance (HM Government, 2020), including site operating procedures for construction sites, published on 11 May 2020 (CLC, 2020a)
- advice on accessing support from government schemes such as the job retention scheme published on 1 June 2020 (CLC, 2020b) and the coronavirus business interruption loans scheme, published on 30 April 2020 (CLC, 2020c)
- guidance on contractual behaviours and avoiding disputes, published 28 May 2020 (CLC, 2020d)
- developing an industry recovery plan, published on 1 June 2020 (CLC, 2020e).
The latter has been developed by the industry with support from government. It provides a strategy for construction to restart, increase and sustain activity across the construction supply chain, and then refocus back on the delivery of the government’s strategic policy objectives.
‘I have been pleased and proud to see the collaborative approach NEC users and industry have taken in responding to the Covid-19 pandemic’
Fair and prompt payment
In my last editorial I talked about payment performance and fair and prompt payment. Cashflow has become even more critical in the current pandemic as firms strive to maintain their businesses and pay staff. Please continue to pay your suppliers.
To help support the industry, the UK government published procurement policy note PPN 02/20 on supplier relief due to Covid-19 on 20 March 2020 (Cabinet Office, 2020a). This set out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the pandemic.
As part of the package there is a set of model terms that contracting authorities can use to provide contractual relief to suppliers who have been affected by Covid-19. They have already been used by the NHS Procure22 framework for most of England’s Nightingale temporary hospitals.
Dialogue not dispute
Disputes, particularly at this time, can put the survival of businesses both large and small at risk. It is therefore important that people treat each other properly and avoid placing a burden on supply chains.
On 7 May 2020 the Infrastructure Projects Authority published guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the Covid-19 (Cabinet Office, 2020b). This includes being reasonable and proportionate in responding to performance issues and enforcing contracts (including dealing with any disputes), acting in a spirit of cooperation and paying people on time.
The principles all chime very much with those embodied in the NEC3 and NEC4 suites of contracts. Both the Covid-19 guidance and the PPN are being kept under review.
NEC Users’ Group Conference
Along with many industry events, this year’s annual NEC Users’ Group Conference has also been a casualty of Covid-19. However, I am pleased we were able to hold our first digital conference on 15−17 June with a great agenda, speaker line-up, workshop programme and awards ceremony.
Cabinet Office (2020a) Procurement Policy Note - Supplier relief due to COVID-19 Action Note PPN 02/20.
Cabinet Office (2020b) Guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the Covid-19 emergency.
CLC (2020a) Construction Sector - Site Operating Procedures: Protecting Your Workforce During Coronavirus (Covid-19), Version 4.
CLC (2020b) Guidance note: Coronavirus Employment Schemes.
CLC (2020c) Streamlined loans needed to avoid liquidity crunch.
CLC (2020d) CLC Covid-19 Contractual Best Practice Guidance.
CLC (2020e) Roadmap to Recovery − An Industry Recovery Plan for the UK Construction Secto.
HM Government (2020) Working safely during COVID-19 in construction and other outdoor work: Guidance for employers, employees and the self-employed.
Written by Dr. David Hancock, NEC Users' Group Chair and Construction Director, IPA
POSTED BY NEC Contracts