NEC UK WORKSHOPS 2016 :
MAXIMISING SUCCESS WITH THE NEC3 PROGRAMME
25 MAY 2016 | LONDON
Sponsored By
neccontract.com/events
Dear delegate,
NEC User’s Group workshop 2016
Welcome to your NEC Users' Group workshop. We are pleased that you have been
able to attend and hope that you get the most out of it.
Our speakers are all very passionate about NEC and none more so than Ben
Walker. Please take the opportunity to get everything you can from Ben today whilst
we cover the topic of ‘Maximising success with the NEC3 programme’. Please do
contribute as best you can in the sessions.
As NEC Users’ Group members, we would love to hear any thoughts you may have
on improving your benefits or on any issues during the day. For these, please
contact John Donato.
After the event we would be grateful to receive your feedback and the form will be
emailed to you. We would also appreciate your thoughts on possible future topics for
these workshops, your thoughts on topics/speakers for next years' Annual Seminar
and any ideas you may have to improve the NEC Users' Group.
Have a great day!
Robert Gerrard
NEC Users’ Group Secretary
PROGRAMME
8.30 - 9.00 REGISTRATION AND NETWORKING
9.00 - 10.30


Five functions of the Accepted Programme
Programme preparation and revision
10.30 - 10.45 MORNING COFFEE AND NETWORKING
10.45 - 12.30
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

Transitioning from an administrative chore to a valuable tool
Top tips and practical things to implement today
Consequences of not having a programme
12.30 - 13.30 LUNCH
13.30 - 15.00



Compensation event assessment
Assessment before the event
Assessment after the event
15.00 - 15.15 AFTERNOON COFFEE AND NETWORKING
15.15 - 17.00


Case Study workshop
Summary
17.00 FINISH
BEN WALKER
NEC Tutor, Examiner and CEMAR Founding Director
Ben has 14 years’ experience working in the construction industry. He has performed various roles on a
variety of construction and maintenance contracts. Ben’s company developed the internet based CEMAR
system, administering some of the UK’s largest NEC and FIDIC portfolios, collectively worth circa £50
billion.
His main areas of expertise are contract strategy, risk, change and programme management.
Ben has lectured extensively on the NEC since 2008 as a tutor for Thomas Telford Limited, the owners and
publishers of the NEC family of contracts. Ben delivers training and workshops including bespoke courses
to a broad range of clients in the UK and overseas. He recently contributed to the drafting of the new
national Highways Management Efficiency Programme contract, based on the NEC3 Term Services
Contract.
Ben is an examiner for the Institution of Civil Engineers’ Law and Contract Management Examinations. His
wider NEC experience includes:

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
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
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Led the development of CEMAR - a web-based tool administering NEC and FIDIC programmes with a
combined value of circa £50 billion. CEMAR is used across all sectors including airports, nuclear,
housing, highways, rail, FM and utilities.
Led various major NEC/CEMAR mobilisations and personally trained circa 1,300 practitioners over the
last 6 years.
Delivered over 150 NEC training courses, workshops, roadshows and lectures throughout the UK and
overseas
Participated in various procurement and tender evaluation exercises
Service Manager for £40m/annum local authority Highway Services NEC3 TSC
Delay and disruption analysis over a significant number of NEC ECC compensation events
Provision of consultancy advice and support to clients procuring, tendering and implementing NEC
contracts
Development of various KPIs and innovative/unique contract strategies in an NEC3 setting
The introduction of a Quality Management System certified under ISO 9001:2008 for his NEC
orientated company
Ben works with clients to align their internal processes with NEC procedure to achieve effective, compliant
administration and contract management.
Ben has a 1st class honours degree in civil engineering. He is familiar with various dispute resolution
techniques and has attended introductory courses in adjudication and arbitration through the Chartered
Institute of Arbitrators.
Maximising Success with the
NEC3 Programme
NEC Users’ Group Workshop
May 2016
© NEC Contracts
1
Welcome
Maximising success with the NEC3 Programme
NEC Users’ Group Workshop
Delivered by Ben Walker
May 2016
© NEC Contracts
2
Workshop Programme
8.30 - 9.00 REGISTRATION AND NETWORKING
9.00 - 10.30
• Five functions of the Accepted Programme
• Programme preparation and revision
10.30 - 10.45 MORNING COFFEE AND NETWORKING
10.45 - 12.30
• Transitioning from an administrative chore to a valuable tool
• Top tips and practical things to implement today
• Consequences of not having a programme
12.30 - 13.30 LUNCH
May 2016
© NEC Contracts
3
Workshop Programme
13.30 - 15.00
• Compensation event assessment
• Assessment before the event
• Assessment after the event
15.00 - 15.15 AFTERNOON COFFEE AND NETWORKING
15.15 - 17.00
• Case Study workshop
• Summary
17.00 FINISH
May 2016
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4
Five functions of the Accepted Programme
If we don’t have a programme we can’t effectively….
1. evaluate tenders ‘the how’ to ‘the what - Works Information’,
2. plan the remaining activities,
3. mitigate risk,
4. assess compensation events,
5. forecast Defined Cost to Completion (for Option C to F)
6. assess payments
7. coordinate resources for tests, inspections, acceptances and
8. report on the project….. (Whooops, more than five!)
May 2016
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5
Programme preparation and revision
• what to include and how to present
• ‘links’, ‘float’ and ‘terminal float’
• right way to show time risk allowance
• timings for submission, revision and replies
• showing compensation events reality (clause 31.3)
• showing effects of implemented compensation events (clause 32.1)
May 2016
© NEC Contracts
6
Programme preparation
What does a programme include?
• It is useful to think of dates required on the programme in pairs.
• Most dates to be shown are either a contractual deadline / milestone or a reality / planned
reality.
• It is not helpful to have one without the other.
• Contractual dates can only change in accordance with the conditions of contract.
• Some dates are defined terms or identified terms, or both. Always look them up.
‘contractual / deadline’
‘planned reality / actual’
starting date
order and timing of work
access dates
order and timing of work
Key Dates
date when planned to meet Condition for Key Date
Completion Date
May 2016
Completion or planned Completion
7
© NEC Contracts
Programme preparation
Example of a paired dates… Completion and Completion Date.
• Gives rise to ‘terminal float’ - not defined
term
• float is available to accommodate the
effects of a compensation event or lack of
progress by the Contractor.
• ‘terminal float’ or ‘Contractor’s float’ is
•
•
•
A
float
B
float
C
D
the period between planned Completion
and the Completion Date,
owned by the Contractor and can’t be used
to mitigate compensation events and
quicker to say than reciting clause 63.3.
E
planned Completion
terminal float
Completion Date
May 2016
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GROUP WORKING 1
Where are defined and
identified terms?
Explain for each date in the
previous table the reason
for it being defined,
identified or both…
May 2016
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Programme preparation
• Contract Date – date when this contract came into existence 11.2 (4).
• starting date – identified in Contract Data part one. The date when the Contractor’s obligations begin
• access date - identified in Contract Data part one. The date when the Contractor gets access to the
site. There may be more than one access date.
• Completion Date – This is the date when the Employer requires the project to be completed 11.2 (3).
The Completion Date is identified as the completion date in either contract data part one or two.
....unless changed in accordance with the contract.
• Key Date is the date by which work is to meet the Condition stated 11.2(9).
• The key date and the condition is identified in Contract Data part 1 and may be changed in
accordance with the Contract. Used to manage the interface risk between different contractors on the
same project.
May 2016
10
© NEC Contracts
Programme preparation
What does a programme include?… continued
•
•
•
•
•
order and timing of operations
order and timing of work of Employer and Others
provisions for float, time risk allowances, health and safety
acceptances
for each operation, a statement of how Contractor plans to do
work identifying principal Equipment and resources
May 2016
11
© NEC Contracts
Programme preparation
• order and timing of operations – example links
THE FINISH TO START LINK
THE START TO START LINK
E.g. A = install cable,
E.g. A = Dig a hole
B = electrical testing
Activity ‘A’
Activity ‘B’
Activity ‘B’
‘B’ cannot start until ‘A’ is complete
May 2016
B = Remove waste material
Activity ‘A’
‘B’ can start at the same time as ‘A’
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Programme preparation
• order and timing of operations – example links
THE START TO START LAG LINK
THE FINISH TO FINISH LINK
E.g. A = Excavate trench,
E.g. A = Installation
B = Install pipe
B = minor Defect correction
Activity ‘A’
Activity ‘A’
Activity ‘B’
Activity ‘B’
‘B’ can start so many days/weeks after
the start of ‘A’
May 2016
‘B’ can finish at the same time as ‘A’
13
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Programme preparation
• float
Activity ‘A’
TOTAL FLOAT
Activity ‘B’
FREE FLOAT
TOTAL FLOAT
Activity ‘C’
Activity ‘D’
• Activity ‘A’ can move along its float & will move activity ‘B’. When the end of the float is
reached it becomes critical.
• Is available to accommodate
• the time effects of a compensation event
• lack of progress by the Contractor
May 2016
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Programme preparation
• what is the critical path?
• the critical path is simply the longest path of work activities
through the programme from start to end
• the critical path controls the duration of the programme
• critical path activities are said to have no float
May 2016
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Programme preparation
• what is risk allowance?
• risk allowance is the difference between best productivity
and likely/realistic productivity
• risk allowances are not float
• they are owned by the Contractor as part of thier realistic
planning to cover their risks
• they are not used for mitigating the effects of compensation
events
May 2016
16
© NEC Contracts
Programme preparation
• showing time risk allowance
activity
duration
time risk allowance
A
15
3
B
10
2
activity
15
25
OPTION 1
duration
time risk allowance
A
12
n/a
A (TRA)
3
n/a
B
8
n/a
B (TRA)
2
n/a
activity
duration
time risk allowance
A
12
n/a
B
8
n/a
Total TRA
n/a
5
May 2016
0
OPTION 2
OPTION 3
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GROUP WORKING 2
Which method of showing
risk allowance from previous
slide is ‘best’?
What are the advantages
and disadvantages of each
option?
Why is resourcing
essential? What can’t we
do without this information?
May 2016
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Programme preparation
Showing time risk allowance
activity
duration
time risk allowance
A
15
3
B
10
2
activity
0
15
25
OPTION 1
duration
time risk allowance
A
12
n/a
A (TRA)
3
n/a
B
8
n/a
B (TRA)
2
n/a
activity
duration
time risk allowance
A
12
n/a
B
8
n/a
Total TRA
n/a
5
OPTION 2
OPTION 3
May 2016
19
© NEC Contracts
0
4
Start
Activity A
8
12
Time Risk Allowance = 3 days
4w
4w
Activity B
4w
Activity C
3w
Activity D
3w
Activity E
3w float
3w
Activity F
planned Completion
Completion Date
01/07/2015 Version 2
20
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0
4
8
Activity A
4w
4w
Activity B
4w
Activity C
Activity D
12
CE = 3 day delay access to A
Start
3w
Activity E
3w
3w
Activity F
planned Completion
Completion Date
01/07/2015 Version 2
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21
0
4
Start
Activity A
3w 2d
8
12
?
4w
Activity B
4w
Activity C
3w
Activity D
3w
Activity E
3w
Activity F
planned Completion
Completion Date
01/07/2015 Version 2
22
© NEC Contracts
0
4
Start
Activity A
8
4w
4w
Activity B
4w
Activity C
Activity D
12
3w
Activity E
3w
3w
Activity F
3 days
planned Completion
Completion Date
01/07/2015 Version 2
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Programme preparation
…so a programme is much more than just a bar
chart. It’s a collection of documents, including
method statements, risk and resourcing…
May 2016
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Programme preparation
How is a programme presented?
Likely a collection of
• resource statements /
histograms
• schedules
• network diagrams
• Gantt charts
• method statements
• slide shows
May 2016
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25
Programme revision
• timings for submission and replies
• Clause 31.1 – If no programme is identified in Contract
Data, the Contractor submits a first programme to the
Project Manager for acceptance within the period stated
in the Contract Data.
• Consider clause 50.3. Note its limitations i.e. only applies
to first programme and doesn’t need to be accepted to
release retained sums, just needs to show the
information required.
May 2016
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26
Programme revision
• timings for submission and replies
• Clause 32.1 - Contractor shows on each revised programme:
– actual progress achieved on each operation and affect upon
remaining work
– effects of implemented compensation events
– how Contractor plans to deal with any delays and to correct
notified Defects
– any other changes that Contractor proposes to make
The second bullet is much commentated on. Lets take a look
after the break, at what this means and more importantly what it
doesn’t mean…
May 2016
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Workshop Programme
Coffee & Networking
10.30* – 10.45
(*unless we’re in delay)
May 2016
28
© NEC Contracts
Programme revision
Showing reality and effects of implemented compensation events
1. programme before impact
2. programme showing impact of instruction, weather,
delay etc.
3. programme showing effects of implemented*
compensation event, i.e. change to Completion Date.
1
planned Completion
*Clause 32.1 does not prevent a programme from showing
the impact of non implemented compensation events.
terminal float
Completion Date
PMI-057
PMI-057
2
planned Completion
3
planned Completion
terminal float
Completion Date
terminal float
Completion Date
29
Programme revision
• timings for submission and replies
• Clause 32.2 - Contractor submits a revised programme:
– Within the period for reply after Project Manager has
instructed
– When the Contractor chooses to
– At no longer interval than stated in the Contract Data
• Project Manager replies within two weeks
May 2016
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30
Programme revision
• timings for submission and replies
Clause 31.3 - gives four reasons for withholding accept of a
programme:
• 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.
May 2016
31
© NEC Contracts
Programme revision
Common misconceptions…
• silent acceptance
• Completion Date is not Works Information. Completing late is not a breach of clause 20.1.
• Showing planned Completion later than the Completion Date, is not ‘desirable’, but is ‘acceptable’.
planned Completion
planned Completion
Completion Date
May 2016
Completion Date
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32
Programme revision
• timings for submission and replies
• If the Project Manager withholds acceptance for a reason not
stated in contract it is compensation event under clause 60.1(9)
• Acceptance of a programme by the Project Manager is not a
condition precedent to the Contractor proceeding with the work
May 2016
© NEC Contracts
33
Practical tips to implement today
Transition from a chore to a valuable tool….
• Do not take the too long to reply to a programme submitted for acceptance
(two weeks is too long)
• If not accepted promptly, there is increasing progress, hindsight, and likely
more compensation events to muddy the waters
May 2016
© NEC Contracts
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Practical tips to implement today
Transition from a chore to a valuable tool….
• Day 1 – Contractor submits programme to Project Manager for acceptance
• Day 2 - programme review meeting with Project Manager – focused on
critical activities and programme narrative, changes from last submission
• Day 4/5 – Project Manager accepts programme – becomes Accepted
Programme
• Day 5 – re-baseline programme and use that programme to progress and
monitor the work
May 2016
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Practical tips to implement today
Transition from a chore to a valuable tool….
• Awareness of clause 14.1
• Works Information Guidance suggests schedule of Employer / Other deliverables,
commitments. Do you think this is a good idea?
• Update daily
• Use a white board first, ground up… [yesterday / today / tomorrow]
• Build other management activities around it
• Synergy with Works Information, forecasts, payment, Activity Schedule etc.
May 2016
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GROUP WORKING 3
Let’s take a look at the
sanctions and motivators.
14.1, 50.3, 60.1(6), 60.1(9),
64.1, 64.2.
May 2016
37
© NEC Contracts
Consequences of not having a programme
• Huge disadvantage to both Parties – refer to ‘five(+) functions of the programme’
• If Contractor fails to submit:
– Clause 50.3
– Clause 64.1, 64.2 ‘does’ not ‘may’. Any Project Manager thinking withholding
acceptance is easy option, must remember they are taking on compensation event
assessments
• If Project Manager fails
– to reply, clause 60.1(6)
– to give reasons in the contract, clause 60.1(9)
May 2016
38
© NEC Contracts
…a slight deviation from programme
compensation events…
• Do we really understand the principle of clauses 63.1 and 63.3 and how compensation events are to
be assessed? An understanding of this helps us to approach delay effects more appropriately…
existing Activity Schedule price = £8,000
100 KW Generator
revised Activity Schedule price = £ ?????
•
•
•
14.3 instruction
61.1 notification [60.1(1)]
61.1 instruction for quotation
•
Quotation – but how is it
calculated? What is the
assessed change to the
Prices? Clause 63.1 / 63.12
150 KW Generator
Defined Cost = £15,000
May 2016
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GROUP WORKING 4
Read clause 63.1 carefully.
How do we approach the
compensation event and
arrive at a revised Activity
Schedule price for the
bigger generator?
May 2016
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Workshop Programme
Lunch
12.30 – 13.30
May 2016
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41
GROUP WORKING 5
List the ways in which the
Completion Date can
change and in which
direction. (hint… we think
there are four)
List some factors that may
affect planned Completion.
May 2016
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Assessing compensation events
Clause 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 on the Accepted Programme.”
Let’s take a look…
May 2016
43
© NEC Contracts
Assessing compensation events
0
4
8
Start
4w
Activity A
12
Accepted programme
4w
Activity B
4w
Activity C
3w
Activity D
3w
Activity E
3w float
3w
Activity F
planned Completion
Completion Date
May 2016
44
© NEC Contracts
Assessing compensation events
0
4
8
12
Start
4w
Activity A
4w
Activity B
Activity C
Activity D
4w
CE
3w
Activity E
3w
3w
Activity F
planned Completion
Completion Date
May 2016
© NEC Contracts
45
Assessing compensation events
0
4
8
Start
4w
Activity A
12
Accepted programme
4w
Activity B
Activity C
4w
CE
3w
Activity D
3w
Activity E
1w float
3w
Activity F
planned Completion
Completion Date
May 2016
46
© NEC Contracts
Assessing compensation events
0
4
8
12 13
Start
1w delay
4w
Activity A
(Delay
Damages)
4w
Activity B
Activity C
4w
CE
3w
Activity D
3w
Activity E
3w
Activity F
2w
planned Completion
Completion Date
May 2016
47
© NEC Contracts
Assessing compensation events
0
4
8
12 13
Start
4w
Activity A
Activity C
1w float
4w
Activity B
4w
CE
Activity D
3w
3w
Activity E
3w
Activity F
2w
planned Completion
Completion Date
May 2016
© NEC Contracts
48
Assessing compensation events
0
4
8
Start
4w
Activity A
12
Accepted programme
4w
Activity B
4w
Activity C
3w
Activity D
3w
Activity E
1w float
3w
Activity F
planned Completion
Completion Date
May 2016
49
© NEC Contracts
Assessing compensation events
0
4
8
12
Start
4w
Activity A
4w
Activity B
4w
Activity C
3w
Activity D
3w
Activity E
CE
3w
Activity F
planned Completion
Completion Date
May 2016
50
© NEC Contracts
Assessing compensation events
0
4
8
12 13
Start
Activity A
4w
4w
Activity B
4w
Activity C
Activity D
3w
Activity E
3w
CE
3w
Activity F
planned Completion
Completion Date
May 2016
© NEC Contracts
51
Assessing compensation events
0
4
8
12 13
1w float
Start
4w
Activity A
No delay
damages
4w
Activity B
4w
Activity C
Forecast cost
1 week delay
in CE
3w
Activity D
3w
Activity E
CE
3w
Activity F
planned Completion
Completion Date
May 2016
© NEC Contracts
52
GROUP WORKING 6
Some assessments happen
in advance of the event,
many happen after the
event.
How is clause 61.3
relevant?
May 2016
© NEC Contracts
53
GROUP WORKING 7
Some assessments happen in advance of
the event, many happen after the event.
Let’s look at some standard* techniques.
- ‘as-planned’
- ‘collapsed as-built’
*Do they work with NEC3?
May 2016
© NEC Contracts
54
Workshop Programme
Coffee & Networking
15.00 – 15.20
May 2016
55
© NEC Contracts
Compensation event assessment
One suggested approach…
•
progress programme with works to date
•
reschedule programme and check if any effect to Key Dates or planned Completion.
If yes – reschedule to mitigate effect
•
rebase line (interim) programme
•
input compensation event and reschedule programme to assess effects
•
save a filtered programme demonstrating the effect the compensation event has
had (clause 62.2 programme)
•
if there is a second compensation event to input, re-baseline and repeat the process
Is this compliant?
May 2016
56
© NEC Contracts
Systematic input of a CE into a programme
WEEK NUMBERS
2
4
6
8
10
14
16
EXCAVATE
CE001 WORKS
INSTALL PIPE
INSTALL ACCESS ROAD
BACKFILL
REFURB BUILDING
PLANNED COMPLETION
•
01/07/2015 Version 2
Accepted Programme from week 6 – now week 8
•
CE002 involves 2 weeks additional works to Refurb Building
1.
Progress programme
2.
Rebaseline
3.
Input CE, add logic links and rebaseline
© NEC Contracts
57
Systematic input of a CE into a programme
WEEK NUMBERS
2
4
6
8
10
14
16
EXCAVATE
CE001 WORKS
INSTALL PIPE
INSTALL ACCESS ROAD
BACKFILL
REFURB BUILDING
PLANNED COMPLETION
1. Progress programme
01/07/2015 Version 2
58
© NEC Contracts
Systematic input of a CE into a programme
WEEK NUMBERS
2
4
6
8
10
14
16
EXCAVATE
CE001 WORKS
INSTALL PIPE
INSTALL ACCESS ROAD
BACKFILL
REFURB BUILDING
PLANNED COMPLETION
1. Progress programme
2. Rebaseline (Interim)
01/07/2015 Version 2
59
© NEC Contracts
Systematic input of a CE into a programme
WEEK NUMBERS
2
4
6
8
10
14
16
17
EXCAVATE
CE001 WORKS
INSTALL PIPE
INSTALL ACCESS ROAD
BACKFILL
REFURB BUILDING
CE002 ADDITIONAL WORKS
PLANNED COMPLETION
1. Progress programme
2. Rebaseline (interim)
3. Input CE002, add logic links and rebaseline
01/07/2015 Version 2
© NEC Contracts
60
Systematic input of a CE into a programme
WEEK NUMBERS
2
4
6
8
10
14
16 17
EXCAVATE
CE001 WORKS
INSTALL PIPE
INSTALL ACCESS ROAD
BACKFILL
1 week float
REFURB BUILDING
CE002 ADDITIONAL WORKS
PLANNED COMPLETION
1. Progress programme
2. Rebaseline (interim)
3. Input CE, add logic links
4. Once agreed – Rebaseline (permanent) and note any change to Critical Path
01/07/2015 Version 2
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61
GROUP WORKING 8
Feedback session. How do
you assess time effects?
Do we all agree with this
approach?
Is it compliant?
Why don’t we just accept
the programme more
frequently?
May 2016
Questions
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62
18/05/2016
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18/05/2016
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66
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NEC Golf Day
3 August 2016
PGA National Course, The Belfry, Birmingham
• H
eld at the world famous Belfry
Golf Club near Birmingham
• A
unique chance to network with
other NEC users’ including clients,
consultants and contractors
• A
hearty breakfast including
bacon rolls and tea/coffee
• Lots of prizes to be won, including:
–– Best team
–– Best individual
–– Longest drive
–– Closest to the pin
• Drinks reception and BBQ dinner
• Awards ceremony
Visit neccontract.com/golf16