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January 26, 2021

How to move from being a ‘mark I’ NEC4 project manager to a ‘mark II’

How to move from being a ‘mark I’ NEC4 project manager to a ‘mark II’

Robert Gerrard, NEC Users' Group Secretary

The role of the project manager is critical to the successful performance of any NEC4 Engineering and Construction Contract (ECC). While there are now many competent NEC project managers around the world, they tend to fall into two distinct types: a ‘mark I’, who does everything correctly and within the time periods allowed, and a ‘mark II’, who also does everything correctly but far more quickly and more proactively.

This article looks in detail at the behaviours of the two types − and why the second type is more beneficial to the project, client and contractor than the first.

Mark I project manager

The mark I project manager never fails the contract in terms of the correctness of their actions and the time periods allowed for these actions. They strictly comply with the provisions of NEC4 ECC clause 10.1 and clause 10.2.

Clause 10.1 demands that the project manager ‘shall act as stated in this contract’, such as in the following examples.
  • As soon as a mark I project manager is aware of a matter which could delay completion, they notify an early warning to the contractor (clause 15.1).
  • Under clause 21, where the contractor is designing parts of the works and the scope requires particulars of the design to be submitted to the project manager, the mark I project manager gives acceptance or the reasons for not accepting within the ‘period for reply’ (an identified term, the duration of which being stated in the contract data). The two valid reasons the mark I project manager might use for not accepting the contractor’s design are stated in clause 21.2.
  • In line with clause 31.3, the mark I project manager notifies acceptance of a programme or the reasons for not accepting it. The mark I project manager does this within two weeks of the contractor’s submission.
  • In line with clause 50.1, the mark I project manager assesses the amount due at each assessment date and certifies a payment within one week of each assessment date.
  • In line with clause 61.1, which requires that where a compensation event arises from the project manager giving an instruction, the mark I project manager notifies the contractor of the compensation event at the time of that communication, that communication being the instruction.
  • In line with clause 61.4, where a compensation event is notified by the contractor under clause 61.3, the mark I project manager replies to this notification within one week after the contractor’s notification.
  • The mark I project manager also follows all the communication rules set out in clause 13.
  • Clause 10.2 demands that the project manager acts, ‘in a spirit of mutual trust and co-operation’, such as in the following examples.
  • Clause 15.3 demands that at an early warning meeting, those who attend co-operate in the five bullet-pointed tasks that follow. This includes making and considering proposals for how the effects of each matter in the early warning register can be avoided or reduced. Mark I project managers will tell the truth and give an informed opinion. They understand who will be affected by the event and co-operate in seeking solutions that will bring advantage to them. They know this is a truly collaborative process.
  • When assessing a programme submitted for acceptance, the mark I project manager remembers there are only four valid reasons stated in clause 31.3 for not accepting. If they need to not accept, then they do so. They do not compromise their professionalism or stray outside of the contract, but they remember to state the reasons in sufficient detail to enable the contractor to correct the matter, as required in clause 13.4. Ideally, the mark I project manager speaks with the contractor before not accepting to allow for a discussion, where they may find out they are wrong or the contractor is, or both are. In this style of working, such matters can be put right during the acceptance process, leading to an acceptance within the time allowed.
  • When assessing a quotation for a compensation event submitted by the contractor, the mark I project manager remembers there is a single quotation that is supposed to address all time and cost implications. They strive for the right outcome here but use good judgement as to where best to spend their valuable time. There are lots of things to think about. For example, they spot an obvious error such as an arithmetical one and correct it. They either ask for a revised quotation, explaining why, or just assess it themselves under clause 64 if they are happy with the rest of the quotation and think that asking for and getting a revised quotation is wasteful in time and resources. If they think the amount of time and or money on the quotation is wrong, that it is far too high or far too low, they challenge it and ask questions. They may find out they are more correct than the contractor or not, as the case may be. If both parties are wrong, the mark I project manager’s collaborative approach will uncover that in good time to benefit the project. When something is obviously missed out, such as a significant compensation event that clearly delays a key date or the date for planned completion of a section of the works but nothing is stated on the quotation for this delay, the mark I project manager will say and do something. And, when the contractor has made no allowance under clause 63.8 for risk, again for a significant compensation event, the mark I project manager knows that is not right and will at least ask the question ‘why?’
  • If option X12 on multiparty collaboration is incorporated into a contract, the clauses refer to the promoter’s representative that leads the core group, which could very well be the mark I project manager. If they are not acting in this role, the mark I project manager will still have an active role within this group of partners who are collaborating to achieve the promoter’s objective. The mark I project manager will share the partners’ objectives too and join up the dots in a collaborative way. Clearly the mark I project manager plays a vital and valuable role. It is the minimum target level for NEC4 ECC project manager accreditation course, and quite a leap from where some project managers are currently. Learning the right behaviours takes time, and those wishing to put themselves forward for mark I project manager roles need to have a good hard think of the competencies they have and whether these are sufficient. But it does not stop there.

‘Clearly the mark I project manager plays a vital and valuable role. It is the minimum target level for NEC4 ECC project manager accreditation course, and quite a leap from where some project managers are currently.’​

Mark II project manager

The mark II project manager does everything stated above, but dramatically improves the time taken for their actions and does so with a quite different attitude and mindset.

The NEC4 ECC generally allows reasonable time periods for both the contractor and project manager to fulfil their obligations. There is even provision to extend this, such as when obtaining a quotation from a specialist subcontractor is proving difficult. But rather than delay the contract, a mark II project manager might decide to look again at the scope, which could be just too demanding (see below). Certainly, some of the time periods in NEC4 ECC are more than generous, giving the mark II project manager significant room for improving project performance.

With regard to the programme, the project manager has a very generous two weeks to reply to the submission of a revised programme. However, only a few contractors might take two weeks to prepare a revised programme, so it seems odd for it to take longer to check than it does to prepare. Even though the mark II project manager is a busy person with numerous tasks to fulfil, they will not fall into a trap of waiting until the end of the two weeks and then judging what has actually happened in the last two weeks rather than the progress and intentions two weeks ago. The mark II project manager can turn acceptance in two weeks into two minutes. They will spend time working with the contractor as the revised programme is being prepared, questioning, challenging, understanding, giving opinions and discussing. They remember that the contractor is generally spending the client’s time and money, so they will work with the contractor in a collaborative way to exceed the provisions of the contract. While looking at the programme, the mark II project manager thinks of how this can be improved or even how the scope can be improved as well, and works towards getting a programme that allows for the safest, most productive and efficient project delivery possible.

With regard to contractor’s design, this can sometimes take 10 weeks (or more) to accept because of the number of stakeholders involved. But the mark II project manage knows that, unless the contractor is doing most of the design in an early contractor involvement project, inserting a 10 week period into the critical path of a contractor already on site makes no sense. Even where a more reasonable ‘period for reply’ for the design of say 4 weeks is included, this is again more than likely on the critical path, which means the client is paying for the contractor to sit and wait for acceptance. Again, the mark II project manager will work closely with the contractor during design preparation. They attend review meetings, challenge, suggest, collaborate, understand, take things away to think about and consult with others (including stakeholders), and work towards the goal of accepting the contractor’s design the day it is submitted.

With regard to scope, the mark II project manager is mindful that every word of it must be physically provided by the contractor. They will look at the number of words, the number of references and the number of other cross-referenced documents and standards, and assess how realistic all this is to deliver. They will challenge whether all the requirements within the scope are actually needed, and whether anything can be eliminated or changed to improve whole-life performance. Because scope changes can be expensive in terms of time and money, they will work collaboratively with the contractor in the earliest stages of the contract to jointly see if the scope can be improved so that any changes can be made cheaply and quickly. They know this is worthwhile because a well-written, lean, clear scope without ambiguities or inconsistencies is priceless.

Finally, with regard to compensation events, the mark II project manager realises the importance of keeping the prices and various dates as up to date as possible. They try quickly to agree the time and cost effects of compensation events by doing so in an open, collaborative and adult way. While agreeing change can be time consuming and a burden, mark II project managers do not let it consume all of their efforts. The compensation event process is just another change management process, needing good judgement as to when and where they put their efforts. With assessments of the money side of compensation events, they try to use clause 63.2 as the first port of call. Otherwise they revert to the default of clause 63.1, but produce a joint quotation with the contractor rather than using a ‘them and us’ approach. If it a significant compensation event, the mark II project manager arranges a joint team of complementary skills between the contractor and project manager’s staff to agree the time and cost provisions of a quotation, enabling it to be reviewed, submitted and accepted as quickly as possible. If a dispute emerges that is even worth having, the mark II project manager helps to get it on the table quickly and in front of senior project representatives. They do not take a confrontational position; they aim for openness and honesty and try to find something everyone can all live with.

The mark II project manager also applies the above approach to several the other processes in the NEC4 ECC that lend themselves to this type of technique. They work collaboratively to create significant improvements in outcomes compared to the traditional ‘them and us’ model.

Key Points
  • A ‘mark I’ NEC4 ECC project manager does everything correctly and within the time period allowed, such that both the client and contractor benefit.
  • A ‘mark II’ NEC4 ECC project manager does everything correctly but much more quickly and proactively, saving both parties time and/or money.
  • Examples of mark II behaviour include collaborating with the contractor to improve the scope and respond far sooner to revised programmes, contractor’s designs and compensation events.

Summary

NEC4 ECC clients and contractors will be well served if there is a mark I project manager in place. But they will benefit even more with a mark II version. This can happen in one of two ways –either the mark I version upgrades themselves, or the client can seek a replacement.
POSTED BY NEC Contracts
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