NEC Contracts - Programmes under ECC and PSC webinar

Richard Patterson – Mott MacDonald
Engineering and Construction Contract (ECC) and Professional Services Contract (PSC)
Based on NEC3, with changes for NEC4 in purple
Slides for ECC but same for PSC
NEC - programme

21/07/2021 Mott MacDonald | NEC Programme 2
Richard Patterson
Chartered Engineer
Mott MacDonald NEC
Advisory Services
32Years with
Mott MacDonald
25Years with
The NEC
1 Year with NEC as
NEC Consultant

Where are you calling in from?
ⓘ Start presenting to display the poll results on this slide.

21/07/2021 (c) Mott MacDonald 2020 | NEC001 5
NEC Bitesize
2021
https://mottmac.shar
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Date Session Code
22 January 2021 NEC Contracts - An Introduction - Why are they so different? NEC0001
09 February 2021 NEC - Introduction to the NEC Professional Services Contract (PSC) - pre-
award
NEC0020
01 March 2021 NEC - Introduction to the NEC Professional Services Contract (PSC) - contract
management
NEC0021
30 March 2021 NEC Engineering and Construction Contract (ECC) - Contract strategy (main &
secondary options)
NEC0003
29 April 2021 NEC Engineering and Construction Contract (ECC) - Preparing the tender
documents; tender evaluation
NEC0004
24 May 2021 NEC Engineering and Construction Short Contract (ECSC) NEC0029
22 June 2021 NEC ECC and temporary works NEC0028
14 July 2021 NEC Contracts - Programmes under ECC and PSC NEC0005
17 August 2021 NEC Contracts - The Risk Register/Early Warning Register and risk allocation
and management
NEC0006
13 September 2021 NEC Engineering and Construction Contract (ECC) - compensation events NEC0007
13 October 2021 NEC Engineering and Construction Contract (ECC) -The Supervisor's roles and
responsibilities
NEC0008
08 November 2021 NEC Engineering and Construction Contract (ECC) - Defined Cost, the
Contractor's system and auditing
NEC0009
08 December 2021 NEC and BIM NEC0026

•16 June 2021 – NEC contracts – an introduction
•20 July 2021 - NEC contracts – programmes
•19 August 2021 - NEC contracts – early warning
•29 September 2021 - NEC contracts - compensation events
•27 October 2021 – NEC contracts - the Supervisor
•24 November 2021 – NEC contracts NEC3 to NEC4- key
changes
•Mott MacDonald's NEC sessions for APM
•All 18:00 – 19:00

What industry do you work in?

Do you work for:

NEC experience:

Programming:

• You can LEARN from the past
• You can only MANAGE the future
• Programme is key
• NEC ECC has the most detailed and
ACTIVE requirements for programme
management of ANY contract

• We (all) need a plan!
Why is the programme so important?
• 63.3 (ECC4 63.5): ‘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’
• With no programme we have no means of ‘managing’ the
Completion Date – ie when ‘Completion’ is required

• In tender documents the
Employer/Client can either
• ask for the (Accepted)
Programme from all Bidders
in Contract Data part two or
• ask for a programme from
the Contractor within X
weeks of the Contract Date
in Contract Data part one
• First Accepted Programme has
no ‘special’ status
• 11.2 (1) ‘The Accepted
Programme is the
programme identified in
the Contract Data or is the
latest programme
accepted by the Project
Manager. The latest
programme accepted by
the Project Manager
supersedes previous
Accepted Programmes’.
Accepted Programme is key …..but the first is not ‘special’

NEC Newsletter , Sept 2020
https://www.neccontract.com/About-
NEC/News-and-Media/Helping-NEC-
clients-decide-the-best-way-to-get-a-
first-programme-in-place

• Contractor
• does not start work on
the Site (30.1) until the
first access date and
• does the work so that
Completion is on or
before the Completion
Date
• The PM decides the
date of Completion &
certifies (30.2)
Obligations
Completion by Completion Date

• (2) The Employer /
Client does not
allow access to and
use of a part of the
Site by the later of
its access date and
the date shown on
the Accepted
Programme.
Client does not
provide something
which he is to
provide by the date
for providing it
shown on the
Accepted
Programme.
Client or Others
• do not work within
the times shown on
the Accepted
Programme…
The compensation events under 60.1 include:
… and the Employer (ECC4 Client) has
obligations too
‘Others’ are ‘third
parties including
eg utilities –
beware!

Contract
Date
Completion
Date
completion
date
planned
Completion
date of
Completion
take over
< 2 wks
defects
date
starting
date
All dates in italics identified in
Contract Data
If Option X5, Sectional Completion, is included,
references relevant to Completion and Completion Date
apply also to each section.
date when
contract
came into
existence
Contractor
has risks
(81.1) and
so provides
insurances
(84.2, 85.1)
Employer
/ Client
provides
access to
(parts of)
Site
(33.1)
key
date(s)
Key Date(s)
(optional)
by which
stated
conditions
to be met
25.3
Required date to achieve
Completion (as modified only by
• compensation events
• acceleration and
• acceptance of Defects)
the date used to assess the effect
of compensation events (63.3
(ECC4 63.5))
in Part 1 or 2 of Contract Data.
Required date to achieve
Completion as at Contract Date
actual date Completion achieved
(11.2(2), certified (30.2))
Employer / Client takes
over: risk transfer (80.1)
last date to notify Defects
access
date (s)
Not in PSC
‘Completion’ is a
state, not a date
21
Dates in ECC……and PSC

• Completion Date can only be
changed by Project Manager as a
result of
• any one of the stated
compensation events (63.3
(ECC4 63.5)), or
• acceleration (36)
• acceptance of a Defect
(44.2)
• compensation events:
delay to Completion Date
assessed as effect on
planned Completion as
Accepted Programme
Changes to Completion Date
and Key Dates

• Accepted Programme is latest accepted by PM
and includes
• various specified dates
• order and timing of Contractor’s planned
operations
• order and timing of the work of the
Employer / Client and Others – as last
agreed with them
• planned dates to achieve conditions
• provisions for float, time risk allowances
The programme
Contents (31.2)

The programme
• includes
– the dates when, in order to Provide the Works
in accordance with his programme, the
Contractor will need
• access to a part of the Site if later than its
access date,
• acceptances,
• Plant and Materials and other things to be
provided by the Employer / Client and
• information from Others.
Contents (31.2)

The programme
Contents (31.2)
• includes
• for each operation, a
statement of how the
Contractor plans to do the
work identifying the principal
Equipment and other
resources which he plans to
use and
• other information which the
Works Information / Scope
requires the Contractor to
show on a programme
submitted for acceptance.
• So programme often a collection
of documents.

One programme?
• procurement
programme
• design programme
• resources
• detailed short term
look ahead
• critical path
• narrative
all in
‘the
programme’

• We are used to risk allowance in cost estimates
• ECC is the only contract to require ‘time risk
allowances’
• Only function is to allow Contractor to
demonstrate that programme is ‘realistic’ (31.3)
• ‘time risk allowances’ are owned by the
Contractor
• Best shown as a data column in programme as
an allowance within the stated duration of the
operation
The programme
time risk allowances

• ‘Collaborative planning’
• Planning by ‘post-it’
note for each
operation.
• ‘Critical chain project
management’ has time risk
allowances grouped at the
end of the ‘chain’
• If you do not want this you
should state in a Z clause
that time risk allowance is
to be shown for each
operation.
Collaborative planning
time risk allowances

The programme - accepting
50.3 (ECC4 50.5): 25%
of PWDD retained until
Contractor has
submitted a first
programme
……showing the
information which this
contract requires.
(31.3, bullet two)
• reasons for not accepting (31.3) … within 2 weeks
• the Contractor’s plans which it shows are not
practicable
• it does not show the information which this
contract requires
• it does not represent the Contractor’s plans
realistically or
• it does not comply with the Works
Information / Scope.
• And acceptance does not change Contractor’s
obligations or liability (14.1)
• But beware of additional Employer / Client or PM
obligations
• Accepted (yes or no) – but can have accepted ‘and’

“I’ve been a client in this industry
for 20 years. I’ve never accepted a
programme yet and I have no
intention of doing so.”

The programme - revising
• programme revised (32.2)
• on instruction by PM
• when Contractor chooses
• interval stated in Contract Data (32.2)
• Also used for quotation for compensation event
if programme changed (62.2)
But will also need
significant notified CEs to
be ‘realistic’
(sorted in ECC4)
• revised programme (32.1) shows
– actual progress achieved on each operation
and its effect upon the timing of the
remaining work
– (ECC3) the effects of implemented
compensation events
• Project Manager assesses compensation event
whenever there is no Accepted Programme in
place (64.1)
The programme is just the
supplier’s latest story.
They have to DO what it
says in the Scope, not the
programme

• Do NOT wait for the two weeks to respond
• two more weeks of changes, CEs and confusion!
• Day 1: programme review/explanation meeting with
Contractor, Subcontractors(?), PM and Employer
• Day 2: formal submission
• Day 3: acceptance in writing by PM: Accepted
Programme
• Day 4: monitor against new programme
Programme acceptance
The target
Or leave it to those expensive ‘forensic planners’
[oxymoron!?] to try to sort out later!!!

• Employer allows access (33.1)
• Allowed on or before the later of
its access date and the date for
access shown on the Accepted
Programme (33.2)
• PM may instruct Contractor to
stop/start (34.1)
• compensation event 60.1(4)
• But no change to Prices or
delay to the Completion Date
if the fault of Contractor
Access and stopping the work
Access to and use of the Site
(33)
Instructions to stop or not
start work (34)

• main requirement is Completion
by Completion Date
• Employer takes over within 2
weeks of Completion unless
stated otherwise in Contract Data
(35.1)
• may take over part of the works
before Completion – but
compensation event (60.1(15))
• But not a CE if take over is
after Completion Date
• PM may instruct quotation
for acceleration (36.1)
• ….just a clause to agree:
PM cannot force
acceleration
• So use 62.1 alternative
quotations for CEs - with
and without delays to the
Completion Date
Take-over and acceleration
Take over (35) Acceleration (36)

21/07/2021 Mott MacDonald | ECC Introduction 35
programme < > compensation events
• 63.3 (ECC4 63.5): ‘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 (ECC4) current at the dividing date.
• 63.5 The assessment takes into account
• any delay caused by the compensation event already
in the Accepted Programme and
• events which have happened between the date of the
Accepted Programme and the dividing date.
• 62.2 ‘Quotations for compensation events comprise
proposed changes to the Prices and any delay to the
Completion Date and Key Dates assessed by the
Contractor…… If the programme for remaining work is
altered by the compensation event, the Contractor
includes the alterations to the Accepted Programme in his
quotation.’
1
Start with Accepted Programme
current when PM instructed (or
should have instructed) quotations
(ECC4 at the ‘dividing date’)
2 Update to show remaining work
3
Show effect of compensation
event
4
Any delay to planned Completion?
Completion Date is delayed by
same period
https://www.neccontract.com/About-
NEC/News-Media/NEC-issues-NEC4-
Practice-Note

04
01
03
02
Contract
Date
Completion
Date
completion
date
planned
Completion
starting
date
36
Float and ‘time risk allowance’
float terminal float
owned by the Contractor. Only
function to show to PM that
programme is realistic (31.1)
normal
production
rate
time risk
allowance
CE01
NEC4 63.5 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.
CE01
CE01
owned by the
Contractor (63.5)
CE02
owned by
‘whoever gets to it
first’ : ‘first come,
first served!

Scary! and same in PSC
• Affected by compensation events
(63.5)
• Miss a date in the Works Information /
Scope? Sue for damages!
• Completion of a section (X5): take over
and (possibly) ‘predetermined’ delay
damages (if X7) – or bonus (if X6)
• ‘key dates’ to meet ‘conditions’ in
Contract Data part one - more flexible;
no take over and / but ……
• If the PM decides that the work does
not meet the Condition stated …. and…
the Employer incurs additional cost in
carrying out work on the same project
.…the additional cost ….is paid by the
Contractor. The PM assesses the
additional cost ….(25.3)
Key Dates

• The programme to be ‘in the form stated in (the) Scope’ (31.2)
• Clearer ‘dividing date’ separating ‘actual’ and forecast’ in
compensation event assessment
• ‘treated as accepted’ programme (31.3):
• If PM does not respond in two weeks and
• Contractor chooses to prompt and
• PM does not respond in another week
Programme – few, but important
changes in NEC4

The provisions for programming in the NEC
seem:

The programming obligations in NEC make
me:

Summary
• Programme is key
• A specialist skill - not just a ‘primavera jockey’
• Ideally a good, detailed programme at
Contract Date
• Collaboratively update each month
• A commitment from all to use it!
• In PSC contracts as well as ECC contracts

21/07/2021 Mott MacDonald | NEC Programme
Small test?
Subtitle completion date
Completion Date
planned Completion
Completion
date of Completion
Required date for Competition as at
Contract Date
Latest required date for Completion
When supplier plans to get to Completion
Have done all that the WI requires for
Completion and corrected Defects that stop
the Employer using the works.
A ‘state’, not a date’
date of Completion achieved as certified

Excellent papers by Glenn Hide
ICE’s ‘Management, Procurement and Law, May and August 2010
Producing a
programme under
the NEC form of
contract
Managing a
programme under
the NEC form of
contract
https://gmhplanning.
co.uk/wp-
content/uploads/201
1/10/MPL-article-
Producing-an-
NEC3-
programme.pdf
https://gmhplanning.
co.uk/publications/m
anaging-a-
programme-under-
the-nec-form-of-
contract/

21/07/2021 Mott MacDonald | NEC articles 46
Some of our NEC articles, papers and books
Year Title Where published
2021NEC4 PSC: understanding the new payment regime NEC website April 2021
2021Using NEC Outside the UK: an update NEC Newsletter , March 2021
2020Three years on it is time for clients to switch from NEC3 to NEC4 NEC Newsletter , Sept 2020
2020Helping NEC clients decide the best way to get a first programme in place NEC Newsletter , Sept 2020
2020NEC family of contracts pitches clearer, more flexible project management PMI UK Chapter 'Leader' magazine (article a copy of that previously published by
IACCM)

21/07/2021 Mott MacDonald | NEC articles 47
2020NEC contracts: best practice tools for risk allocation and management NEC website May 2020
2020The all important F-words in the NEC NEC Newsletter , March 2020
2020ECC Risk allocation and compensation events NEC website, March 2020
2020How to ensure that bid-winning supply chains actually get used NEC Newsletter, January 2020
2019Project overruns? It’s time to use the F-word (and a proper contract) Mott MacDonald website
2019Links between key NEC processes NEC Newsletter, May 2019
2018Building time-related charges into NEC lump-sum and short contracts NEC Newsletter, November 2018
2018NEC Early warnings - the need for education NEC Newsletter, November 2018
2018NEC contracts – use them anywhere for any industry! - including how NEC covers
PMI's ideas on procurement and project management
IACCM's Contracting Excellence Journal, 18 June 2018
2018Design of Equipment in the ECC NEC Newsletter, 91, May 2018
2018NEC3 to NEC4 – evolution, not revolution; some fixes and some good ideas! In-procurement Magazine JanFeb 2018
2018NEC3 to NEC4 – evolution, not revolution; some fixes and some good ideas! ICE's Management Procurement and Law, December 2017 and on NEC website
from 26 Feb 2018
2018NEC Contracts - are they right for you? IACCM Contracting Excellence Journal, Feb 2018
2017NEC Engineering and Construction Contract (ECC): the necessary interaction
between the Supervisor and the Project Manager
Construction Law Quarterly / NEC website
2017When is task not a Task - in the NEC TSC contract NEC Newsletter Sep 2017, NEC website
2017NEC: how to require something is done by a certain date NEC Newsletter No 86, July 2017, NEC website
2017New NEC4 Design, Build and Operate Contract NEC website
2016How to procure a series of work packages using NEC NEC website
2016NEC contracts are ideal to support project management as set out in the PMI’s
‘Project Management Body of Knowledge’ (PMBOK®)
Linked-in

21/07/2021 Mott MacDonald | Prep of tender docs 48
2016How to procure a series of work packages using NEC NEC website
2016NEC contracts are ideal to support project management as set out in the PMI’s ‘Project
Management Body of Knowledge’ (PMBOK®)
Linked-in
2016Submission of deliverables under the PSC NEC Newsletter No 80, September 2016
2016Enforcement Clauses and Links in the ECC NEC Newsletter No 79, July 2016
2016Can we use the NEC as the basis for a standard international PPP contract? ACE's email newsletter, Infrastructure Intelligence
2016NEC contracts - good for hydropower? NEC Newsletter No 76, January 2016
2015NEC contracts - good for hydropower? Proceedings Hydro 2015, Bordeaux
2015Using NEC to incentivise
lowest whole-life cost
NEC Newsletter No 75, November 2015
2015NEC3 Compared and Contrasted, Second Edition - chapter on NEC vs IChemE
contracts
ICE publishing
2015NEC3 - the Role of the Supervisor ICE publishing
2015NEC for design build finance and operate (DBFO) contracts – taking best practice
procurement into PPPs
ICE’s Management, Procurement and Law, November 2015, and winner of the
Parkman medal for best MPL paper, 2015
2015NEC contracts and the CDM Regulations 2015 ICE’s Management, Procurement and Law, 168, June 2015
2015NEC contracts tick IACCM’s ‘top ten’ box NEC website
2015Making the most of your early warnings – sorting out your TQs and RFIs…. and what
about the opportunities?
NEC website
2015NEC contracts and the Construction (Design and Management) Regulations 2015 NEC website
2015NEC contracts and the CDM Regulations 2015 NEC Newsletter No 72, May 2015
2014Getting your project set
up for ECC
NEC Newsletter No 70, January 2015 (published December 2014)
2014Working with NEC Contracts (in landscape architecture) Landscape (Magazine of the Landscape Institute,. Winter 2014

21/07/2021 Mott MacDonald | Prep of tender docs 49
2014ECC Works Information provided by the Contractor - who takes the risk? NEC Newsletter No 69, October 2014
2014Understanding expenses
in a PSC
NEC Newsletter No 67, July 2014
2014The importance of quality works information and site information in ECC projects NEC Newsletter No 66, April 2014
2013NEC for DBO Proceedings of the ICE - Management, Procurement and Law, Volume 166,
Issue 5, May 2013
2013How to prepare the Scope for an NEC PSC Contract By NEC as part of NEC April 2013
2012Managing Reality - the ECC Manuals ICE publishing
2012NEC3: A User's Guide ICE publishing
2011NEC3: contracts for partnering NEC Newsletter No 56, October 2011
2010Ground Conditions and Risk Allocation: Combining the NEC Engineering and
Construction Contract (ECC) and the Geotechnical Baseline Report (GBR)
Tunnels and Tunnelling Magazine, Dec 2010
20106 key links in the ECC NEC Newsletter No 51, July 2010
2010NEC contracts as an enabler to Partnering May 2010 edition of 'The Partner', which is ‘the annual publication of PSL, which is a
CBI and BIS initiative to promote collaborative business relationships
www.pslcbi.com '
2009Using NEC contracts to manage risk and avoid disputes Proceedings of the ICE - Management, Procurement and Law, 2009, No 4.
2009Use of NEC in legal jurisdictions other than English law NEC Newsletter, No,47, July 2009
2009NEC – A real opportunity for the Clerk of Works Site Recorder, Magazine of the Institute of Clerks of Works
2007NEC and Risk Management NEC Newsletter No 40, Oct 2007
2005NEC Managing Reality: Introduction to the Engineering and Construction
Contract. 5 volumes
ICE publishing
2007Dealing with
contingencies - what happened to the 'Provisional Sum'
NEC Newsletter No 40, Oct 2007
2007NEC3 key dates – more risk on the contractor NEC Newsletter No 40, Oct 2007
2001Using NEC for multiple site, undefined contracts ICE’s ‘Civil Engineering’, May 2001
2000NEC and PFI first for Leeds Healthcare NEC Newsletter No 14, July 2000

www.neccontract.com
Mott MacDonald NEC Contract Advisory
Services
www.mottmac.com
richard.patterson@mottmac.com
+44 (0) 1223 463 606
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