There are many of things to consider when developing an NEC3 compliant programme. But here I want to focus on three fundamentals that are constantly overlooked by main contractors and sub-contractors in their programme development.
Neglecting these elements leaves the contractor commercially vulnerable to client delays due to the lack of evidence that the third party dependency was the real cause of change.
1) Maintaining the Terminal Float
The time between the contractual Completion Date and the planned Completion is commonly referred to as the terminal float (not a defined term). It is clearly stated in the contract that this float is owned by the contractor which means that any delay caused by the client cannot be mitigated by using up the terminal float.
What this means in practice is that if the client causes delays to the planned Completion, the Completion Date will move by the same amount once a compensation event is implemented.
The very same principle also applies to Key Dates and Sectional Completion.
2) Clearly Show Key Dates
Key Dates are defined in the contract as dates for achieving an intermediate milestone. The purpose of key dates is to allow the client to coordinate works between project interfaces and to assign delay damages for not achieving them.
These dates are treated in a similar way to Sectional Completion dates and should have both a planned and contractual date shown in the programme along with the terminal float.
I have frequently seen programmes missing key dates or having progress monitoring milestones labelled as Key Dates when they are not.
3) Client / Third Party dependencies
Without a doubt, the most important information to show on a contract programme are the client and third-party dependencies. These are things that the contractor has no control over but is dependent on to do the works. Demonstration of how any delays affect the planned Completion will form the basis of a Compensation event so it is critical that they are fully logic linked to the activities that depend on them.
The main liability that a client takes on when accepting a programme is that they will provide their deliverables by the dates stated in the Accepted Programme. A simple method to make it easier for the client to accept the programme is to include a filter of client deliverables along with the programme submission.
Final Thoughts
This is just a quick overview of the main things to keep an eye on commercially when developing and maintaining a programme under an NEC contract. Despite being critically important, these principles are often overlooked by project teams resulting in lost opportunities to recover costs from the client and decimating margins.
