An option for clients in both the NEC4 (and NEC3) Engineering and Construction Contract (ECC) and the Professional Service Contract (PSC) is to state how and when they require the contractor or consultant to provide the first programme. Getting a good first programme in place is critical to both the client and supplier.
Clients generally require tenderers to include a programme as part of their tender submission as it helps to see if tenderers have understood their requirements and have a plan. In the case of target contracts, it also helps to see whether the plans and cost build-ups are consistent.
A contentious issue for clients however is whether to include a tendered programme in the contract. In Yorkshire Water Authority v. Sir Alfred McAlpine Ltd , a contractor successfully claimed against a client when the sequence and methods in the tendered programme, which the client had included in the contract, proved to be impossible. Since then, most construction clients using ‘traditional contracts’ have avoided putting the tendered programme in the contract.
But NEC is different to other contracts. In both NEC4 ECC and PSC, the requirements and constraints on the contractor or consultant are solely in the scope (works information in NEC3). The programme is effectively just the supplier’s latest idea on how it intends to get from now to completion. Importantly, the supplier does not have to do what it says in the programme: it can change the timings and methods at will, so long as they comply with the scope (clause 20.1), and each new accepted programme supersedes the last (clause 11.2(1)). Either way, the latest accepted programme is the starting point for assessing the time impact of any compensation events and for that the supplier’s date in the accepted programme for planned completion is critical.
Two options for first programme
The ECC and PSC give clients two options for getting a first programme. They can either ask for a programme to be submitted with the tender and then included in contract data part two, or ask in contract data part one for the contractor or consultant to submit its first programme after award within a stated number of weeks from the contract date. This is a significant decision. Table 1 (Click here to view) sets out some of the advantages and disadvantages of each option, and some suggestions for mitigating the disadvantages.
With either option, the first programme needs to be properly reviewed. Terminal float, which is the period between the supplier’s planned completion date and the client’s required completion date, is owned by the supplier under clause 63.5 (clause 63.3 in NEC3 ECC and NEC3 PSC). As there is a commercial incentive on suppliers to maximise the terminal float, they must be required to demonstrate that durations of operations on the critical path are realistic. This will have to be reviewed by
- the client, if the programme is included in the contract
- the project or service manager, if the programme is requested after award.
Once an ECC or PSC is in place, the project or service manager can reject a submitted programme if the plans are not practicable, it does not show the information required by the contract, it does not represent the plans realistically, or it does not comply with the scope.
Clearly programme review meetings and the NEC obligation to ‘act in spirit of mutual trust and co-operation’ will help both the client and supplier determine whether a submitted programme is practicable and realistic. As ever, the best advice is to talk and listen to each other and then do what it says in the contract.
As can be seen from Table 1, there are clear advantages and disadvantages to each option regarding the first programme. It is hoped this article will help clients make the best decision for their particular contracts.
This article was prepared with Nik Farrar, technical principal of planning at Mott MacDonald, Ian Gannon, head of planning for the south regional investment programme at Highways England, and Matt Orton, director at Metisplan.
- ECC and PSC clients can ask for the tendered programme of the winning bidder to be included as the first accepted programme in contract data part two
- Alternatively, clients can set a postaward date in contract data part one for the winning bidder to submit the first programme.
- There are advantages and disadvantages to each option, and ways to mitigate the latter. Either way, the first programme needs to be carefully reviewed.