1. NEC - Compensation Events Programme & Delay Issues
Kings College Conference July 2005
NEC - Compensation Events Programme & Delay Issues
Richard Bayfield BSc., MSc., CEng., FICE, FCIArb
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2. 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)
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3. 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?
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4. Kings College Conference July 2005
History of Construction in 3 Slides
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5. Kings College Conference July 2005
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6. 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
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7. 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
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8. 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?
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9. 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
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10. 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 –
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11. 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
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12. 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
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13. 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.
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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
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15. 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”
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16. Kings College Conference July 2005
HONDA NEP PROJECT
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17. 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
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18. 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.
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19. 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.
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20. 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.
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21. Kings College Conference July 2005
Programme meeting using whiteboard
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22. Kings College Conference July 2005
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23. Kings College Conference July 2005
Whiteboard Meetings
Consensual + Visible
Identify potential conflict early
No where to hide
Instant record +
Saves Management time
Synthesis not Analysis
Meeting Minutes – see example
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24. Kings College Conference July 2005
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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
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29. Kings College Conference July 2005
Finally
Project successes due to:
Synthesis not Analysis
Notes at
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