NEC - Compensation Events Programme & Delay Issues Kings College Conference July 2005 NEC - Compensation Events Programme & Delay Issues Richard Bayfield BSc., MSc., CEng., FICE, FCIArb 18/01/2019 www.richardbayfield.com Richard Bayfield 1 1

Kings College Conference July 2005 Original Brief CE’s - Programme and Delay Issues Compensation, Delay (i.e. analysis) Analysis – examination, investigation, scrutiny… Synthesis – creation, making, fusion……. NEC – predicated on “synthesis” Traditional Contracts – emphasis on “analysis” Synthesis – pro-active – pre-empting Analysis – re-active – history (delay) 18/01/2019 www.richardbayfield.com Richard Bayfield 4

Introductory Question Kings College Conference July 2005 Introductory Question What is the purpose of a programme? What is the purpose of a programme under the NEC? 18/01/2019 www.richardbayfield.com Richard Bayfield 4

Kings College Conference July 2005 History of Construction in 3 Slides 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Industry Context and NEC Kings College Conference July 2005 Industry Context and NEC Complexity - technical Complexity – people / organisations – intrinsic need for improved communications Fragmentation of industry Different interests Disputes arises from poor communication NEC addresses these issues at a strategic level 18/01/2019 www.richardbayfield.com Richard Bayfield

Back to Programme – who is programme for? Kings College Conference July 2005 Back to Programme – who is programme for? Client? Contractor? Project Manager? Designer? Some one else – the delay analyst? THE PROJECT 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Programme – purpose? Project Management – Martin Barnes – 2 rules 1. "It is only possible to manage the future". 2. "All decisions must be directed towards meeting the clients' objectives". Programme - As a tool to help manage the project / the remaining activities (the future) Programme - Encourage “what if” scenarios Programme - Pre-empting – if decision for x is delayed what is effect? 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Programme Management. Many industries including construction have success stories going back decades - Not a new invention “….the traditional standard forms are weak on programme techniques……” Prof Capper – SCL Paper Sept 1994 “Contract” is a tool for managing risk (Prof Capper) No real difference whether programme is under NEC or not (strategically) Proper Programme Management adds value and reduces risk whatever the contract form 18/01/2019 www.richardbayfield.com Richard Bayfield 14

Kings College Conference July 2005 Programme Management There is no reason why these techniques (critical path programming) should not be applied in a consensual manner within the contract and on a real-time basis in order to generate a regularly updated analysis of employer and contractor delay periods.” - Professor John Uff QC – Are we all in the wrong job? – SCL Paper July 2001” SCL Delay & Disruption Protocol – 2002 www.eotprotocol.com 18/01/2019 www.richardbayfield.com Richard Bayfield

NEC Programme Clauses – 3 Time Kings College Conference July 2005 NEC Programme Clauses – 3 Time Cl 30 – Starting & Completion Cl 31 – The Programme – requirements (31.3) CL32 – Revising the Programme Cl 33 – Possession Cl 34 – Instructions to stop / start Cl 35 – Take over Cl 36 – Acceleration 18/01/2019 www.richardbayfield.com Richard Bayfield

NEC Programme Philosophy – Accepted Programme Kings College Conference July 2005 NEC Programme Philosophy – Accepted Programme “The programme is an important document for administering the Contract. It enables the PM and Contractor to monitor progress and to assess the time effects of compensation events including changes to the completion date.” - from Guidelines to Cl 31 i.e it is a methodology for management of the overall project - Implications? Accepted Programme – base document for assessing time and cost of CE’s 18/01/2019 www.richardbayfield.com Richard Bayfield

Assessing Compensation Event (CE) Kings College Conference July 2005 Assessing Compensation Event (CE) Cl 63.3 – 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. 18/01/2019 www.richardbayfield.com Richard Bayfield 14

NEC Programme update for Compensation Event (CE) Kings College Conference July 2005 NEC Programme update for Compensation Event (CE) Objective is anticipate the effect of the CE on the programme before it happens Completion date is then revised via the accepted programme Associated costs dealt with in advance as a a quote, not as part of an audit 18/01/2019 www.richardbayfield.com Richard Bayfield 14

NEC Programme update for Compensation Event (CE) Kings College Conference July 2005 NEC Programme update for Compensation Event (CE) Forecasting – prospective - quotation Allows Choice (but not always) What if? Subjectivity Synergy Fair “Acceptable” 18/01/2019 www.richardbayfield.com Richard Bayfield 14

Kings College Conference July 2005 HONDA NEP PROJECT 18/01/2019 www.richardbayfield.com Richard Bayfield

Case Study – Major Client Kings College Conference July 2005 Case Study – Major Client 2 Similar Projects on same site Built 10 years apart 40% Financial improvement on second project Positive Global comparison British Construction Industry Award 2002 NEC “philosophy and methodology” project 18/01/2019 www.richardbayfield.com Richard Bayfield

Case Study – Major Client Kings College Conference July 2005 Case Study – Major Client “Compensation Events” dealt with on a contemporaneous basis – “managed not audited”. Final Accounts resolved within 3 months of PC Same methods for construction and process contractors Transparent programme updates every week. 18/01/2019 www.richardbayfield.com Richard Bayfield

BRITISH CONSTRUCTION INDUSTRY AWARDS 2002 Kings College Conference July 2005 BRITISH CONSTRUCTION INDUSTRY AWARDS 2002 Honda's new European plant at Swindon took the Building Award. The "one team one goal" culture of openness and transparency at Honda's New European Plant, and the company's refusal to accept the status quo, has been rewarded with a building cost of only £701/sq m - a 40% improvement on the cost of the original plant at Swindon completed nine years earlier. 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Programme Management Transparency / visibility Emphasis on Communications Emphasis on Pre-planning Emphasis on detailed Programmes Weekly updates for actual progress Standard software (MS Project) Compliance by all trade Contractors. 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Programme meeting using whiteboard 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Whiteboard Meetings Consensual + Visible Identify potential conflict early No where to hide Instant record + email Saves Management time Synthesis not Analysis Meeting Minutes – see example 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Overview Methodology works - Addresses some of the industry failings BUT Synthesis is harder than analysis Needs strong Client commitment (more than just words – needs resources as well!) Needs a competent TEAM with adequate specialist support 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 18/01/2019 www.richardbayfield.com Richard Bayfield

Kings College Conference July 2005 Finally Project successes due to: Synthesis not Analysis Notes at www.richardbayfield.com 18/01/2019 www.richardbayfield.com Richard Bayfield