BXSURCOTraining BusiaPacific@ © NEC PRO. Presented by Dr. Brenda Yip PRO MME NIK MRICS MCIOB MHKICM MCICES RPE BeasarctcO$ erties NBC Proteioa Teaning Core (CNPCI90712 Moshe 3 conto es oc i or Si ied ey ERED ‘22cm mrtotes yy nn pp ne ren pensBXSURCOTraining MODULE THREE - Collaboration and Team Integration SS ae eee Pease @S, Module 3 - AGENDA CCeried NEC Professional Training Coarse (CNPC-190712) Move 3 {Scan ft ms, oe 8 ie ast aoa ca ig, SURCO Ll ‘yay bere ayy ted my pb aay ol tn permis BK SURCO UiBXSURCOTraining 1 Ay fe pres ea yin “snes orm oon 7 Presi of wftons Ter hed cation chy | im poymersby misones chal ‘ses tnta| ete etree! isardatdpacageatccumetraih [9 Char semen pons th ‘ho dfnes re od ter ‘npr oe poe 4a conpteste ngage ity | 10 Seawater payer pier etel 1 Spat patton yng 5 Sepantonchesctaneacasmistata, |" elicattoeeepet| eit manger ado 12 Pong nesta exepon 6 Achcef alton fi secede rye le tmange estat cy | cap tie noe tes ow ee a nie ei by BK SRC Lt ‘sy meyer nny yey us apy we wean pr oF SIRED LkBXSURCOTraining |Collaboration in NEC Contracts 1 NEC2/94Guiance Notes cty and Simply “A fnamant objective ofthe ECC tat ts use should mine he Tico of cpt” Stimuli Good management ith the ECs now pose to buldarangements forth ferent patie to contribute tthe management of» project pon improved paces on © ‘nothot al pares by meane of he cneac fo pp) such proces fo the wove The ACC i therefore Intended to provide 2 modern method for Colyer, designers contctrs and project managers "0. work alana + “people wi be motiated to ply the part ncolaorave management its In thet camera and professional irs to do 50" + By procedie har been desoned 20 that its implementation sould conte rther tan dete athe efectvenes of management fhe ; Bensiracte OS ES NEC Collaborative Philosophy + Promotes good working relationship and fair dealing between contracting parties: » The drafting of NEC Contracts provide an enabling platform and framework to facilitate project collaboration : BeAsirecicOS | Cortied NEC Profesional Training Course (CNPC-190712) Made 3 ‘Scene otis re, nv ee aoe ee ange ine BK SURCO La {ody yt pel yw ony pn gy i en ein 0B SURCO LaBXSURCOTraining NEC3/4 Spirit of Mutual Trust and Co-operation ‘Clause 10: (NECS)~ “The Employer the Contractor, the Project ‘Manager and the Supervisor shal act a stated in thi contract and in 2 {pit of mutual tust and co-operation” What does it mean? Some deo. Spit: parle vay of thinking feeling or behaving espacial & way {tei piel of perder up of peop an ay aie or apbce. + Trust: To belive that someone is good and hones and wil otha you or that something iste end reliable + Covoperste: tot or work topetar fora pata purpose oF to beep by doing whet somacne ast you to 0 ‘The Parties when implementing the contac il behave na god and honest manner nd work together to achieve the projet objective . BeAsiaPaciic OS | Primary NEC Characteristics Clarity and simplicity: » Simple, concise and ‘pain’ English, common Phraseology » Modular format with options Simple clause structure with no cross referencing » No provisional or pe sums Elimination of sources of dispute ~ pre-agreed OH&, single method of evaluating change, programme float » Guidance notes and flow charts ; BersrraneOS CCetifed NEC Professional Training Course (CNPC-199712) Mole 3 ite nm ho a rn he wt ins tin by SUREBXSURCOTraining » Fair Distribution of Risk » Ground Conditions = : » Reasonable Risk Thresholds for Contractor »» Encourages impartial decision-making Ambiguity Risk Reduced » Time/Cost uncertainties removed » Speed of CE agreement reduces payment risk and aids cashflow, improving performance » Sanctions for both Contractor and PM non -compliance 5 BeAsiaraciic OS Certified NEC Professional Training Course (CNPC-190712) Module 3 ‘Cipriani oe su weep eet ing, BK SURCO LaBXSURCOTraining ie and Cost Recovery for Compensation Events += All Compensation Events provide for Time and Cost Compensation » Thresholds introduced for Contractor Liability + Site Conditions = Weather » Removes arguments over responsibility for delay » Makes analysis of delay simpler and quicker » Rapid programme updates give time certainty » Potentially encourages collaboration . BeAsiaractic GS Neutral Dispute Resolver » New Roles mean that Designer/Certifier Conflicts are removed enabling collaboration » Now enhanced with provisions for stepped negotiation wen using adjudieation > daltons new provisions n NECA for Dispute Avoidance Board » New Procedures with speedy neutral decision-making > ate a a behavior-modife to prevent unreasonable asad desions > Reduces the prospect of enduring disputes leading to formal proceedings Cpa a ee : Besar OS Certied NEC Profeslonal Training Course (CNPC-190712) Module 3 cites neon al ews i ny RCOBXSURCOTraining I) eS Open Book Cost and Time > Visiblty of cost through open-book procedure prompted through use of Defined Cost pus Fee evaluation » Provides for inspection of Contractor's costs, > Enhance shared-understanding of cost in project team > Visibility of time through detailed breakdown of programme inuding resources, fat risk allowances >» Acceptance procedure promates vigour fom PM in reviewing programme » Enhanced understanding of time impacts of eary warning matter and CE's > Builds trust and enables collaboration : Beaders Dn el Single method of change valuation » Removes the most common source of money disputes ‘thereby allowing quicker resolution of CE evaluation and payment to Contractor on Lump Sum Contracts » Speeds cashflow thereby reducing cost and improving efficiency +» The Contractor is obliged to tender his fee in CD2 A simple measure with wide-ranging impacts on ‘evaluation of change * Usually a source of dispute between the parties often, remaining unresolved * Allows greater visibility of Contractor price build-up Improves prospects of collaboration . Besar CCeried NEC Professional Training Course (CNPC-190712) Module 3 ‘Sanit fen nr 8 a ft se wht ek ip, ead by BE SURO LkBXSURCOTraining i a ‘Communications » Encourages co-location due to extent of close and timely » Pre-set timescales for communications removes discretion from parties to take more time » Early Warnings * encourage dialogue and problem solving * Reduces impact of potential delays + Improve certainty of project outcomes : BeAsiroctic 6G Po nl General provisions » Actions (Clause 10.1) » Act as stated in this contract + obliges persons to do everything the contract states » Act ina spirit of mutual trust and co-operation ‘+ recommended in the UK Latham Report + underpins ll NEC contracts and clauses + covers obligations and attitude, and sets tone + Teamwork, trust, openness and respect + Some question legal interpretation/enforceabilty? + Most practitioners welcome this change 5 BiAsiaPaciic @S ‘Certied NEC Professional Training Course (CNPC-190712) Module 3 ‘conyers aoe on aa nig iy BK SURCOLBXSURCOTraining Zi Primary NEC Characteristics imulus to Good Management Ps » Clear allocation of funtion and responsibility » Timely and clear decision making ~ certainty » Proactive sk management procedures/ meetings » Effective management of project programme + Prospective evaluation of change ~ reduced disputes » Incentivisation for good performance ~ aligns objectives . BkAsiapactic GS Module 3 - AGENDA 1 rece rtm D> Sees G BeAsiaraciic@ § | CCeried NEC Profesional Training Course (CNPC-190712) Module 3 ‘Shih ofa ne at ihe ut ope aoe whinge, raed by DE SURCO Lk lt ay na ian a erin ny pb ly tl be ris ems BE SURO UaBXSURCOTraining » Standard provisions across delivery/supply chain + Enables talloring of contracts to suit project situation * More certain cost and time forecasting ~ rea ime rsk monitoring » Reduced overspend/overrun isk » otter project planning - time, cost and quality benefits Fewer Disputes shorter final accountsles resources wasted Encourages long-term framework agreements » Better project outcomes A Bensaraic 6S Contractors - ECC Benefits » Timely decision-making by PM Eauitabl isk sharing > Speedy impartial review of cepted issues > Shorter final acounts ash flow > Fever dopuies les resources wasted » More acurte cost and time forecasting > Enhanced profit rom incenistion mesures » Long-term framework agreements : BeAsiapachic OS Certined NEC Profesional Training Course (CNPC-190712) Module $ ‘Seopyh ft oes aa ei tees eva on taiBXSURCOTraining Client - NEC Challenges ocumentary/procedural changes Improving Core competencies - Management, Programming, Estimating “Training in administration of NEC projects Investment in training for in-house personnel to manage projects or external PM consultant costs Development of project level decision making capability/sklls ‘and devolving of authority Recalibrating attitudes towards project value rather than cost ‘outturn cost lowest tender Developing teamwork/partnering mentality BeAsiaPacic Contractors - NEC Challenges Training in NEC contract administration Additional planning/estimating resources required » Openness limits profit upside » Additional sk of pre-pricing variations » Less favourable claims bargaining: position ~shared info > Uabiliy for subcontract claims via independent cetiier > Less favourable subcontractor payment provisions Beasiaracic OS, Certified NEC Profesional ining Course (CNPC-190712) Module 3 steht nts el enn ii ty SURO aBXSURCOTraining Psi ial tae i aaa tans Toni Organisation Commitment 4 » Proactive attitude to making NEC work i * Commitment of sufficient resources + Fisk management + programming + compensation events + gain share through design/technical improvements » Adapting procedures to suit contract obligations and ‘opportunities Training staff in new procedures and skills : BeAsiractcCE, —— Commerciality = Acknowledgement of Overheads and Profit entitlement for, all contract works » Tatget Cost can improve cash flow since payment is. forecast cost plus fee = ay phen » For Lump Sum contracts speedy evaluation of change helps cashflow » Payment certainty for CE's improved » Increased profitability for better performance through incentives including gain-share : Bersih OS Ceried NEC Professional Training Course (CNPC-190712) Module 3 [Scape ie mac an ater nts pd ac retail yD SURCD LitBXSURCOTraining Communication Timely and open information ‘exchanges improve project speed and reduce cost » Clear communication protocols » Set periods of acceptance / reply » Reasons for non-acceptance improves compliance » EDMS, Whatsapp to speed information Corlocation of project team to foster teamwork BeAsiaracicO Ps estes anes iice MB Diba ations noe Competency PARTNERSHIP + Enhanced shilsneeded $38 48 G Fh oe SO + Project management i osreees Sree errant + eareting ati » Competency to achieve contact equrements * enough resources budgeted and committed to project + Wel trained personnel in NEC requirements Understanding of Risk and Opportunity . Bensiasctc OF (Ceried NEC Professional Training Course (CNPC-190712) Modus 3 iyo may ay ued ny pa ply tl ton pean BK SURCO UiBXSURCOTraining Consensus e @ » Openness ~ For Joint Best outcomes Objective Alignment - win-win » Problem-solving - Ownership, flexibility and innovation » Contemporaneous agreement of time and cost issues » Dispute-avoidance mentality ~ no claims » One-Team approach for optimizing outcomes : Benserc eS, Module 3 - AGENDA 1 necotancin em > Sees 3 cote tnt 7 Besancc OS ‘Certised NEC Profesional Training Course (CNPC-190712) Mode 3 (copy afte we the i fe mo ole an sy mn beeen yal py wie |BXSURCOTrai Collaboration, involves ‘COLLABORATION: Sense noeting ‘Awareness We become pat ofa working entity sonst (project tear) with a shred purpose — ‘Metivation- We strive to gain consensus in problem solving or evelopment of ideas Consultation ~We decide a tear when things nee te happen Partpation - We participate in collaboration and expec others to pantcpate “Mediation - We negosate, collaborate together to find 2 compromise Reciprocity We share and we expect sharing in return through reciprociy, Reflection - We thnk and we consider alternatives Engagement -We proactively engage rather than wait and see Collaboration relies on openness and knowledge sharing but also fous tnd accountability onthe part ofthe business organizations. BeAsiaPacc OF » Protecting client interests » Fear of making a mistake/being blamed » Concerns over lack of training/knowledge » Internal organisational systems incompatible » The Change Challenge Barriers to Collaboration moun ct ae es » Historical contractual set-ups sone ee Certified NEC Profesional Training Cousse(CNPC-190712) Module 3 sn a ih fe eto dre tig, ied by BK SURCO Lk 16BXSURCOTraining es The Change Challenge + NEC A“post 80%” contract » Challenges established norms == Resistance to change most likely to. ‘come from implementers (middle management) of Clients and Consultants » Careers /Rewards/Promotions have been built on successful working within existing working frameworks + NEC/Collaborative contracting represents a new uncertainty that for many will be unwelcome + Solution - Top Management Buy-In, Education, Tra Familiarity . persian OS ing ard What is the NEC Philosophy? « BkAsiaPaciic @S | Certified NEC Professional Course (CNPC-190712) Mae 3 (Cini aan ns ew he i ems onl ann ot nine i yD SUROO Ld ‘edhe noted yy a lye Sguywin ee fermi BK SURED LbBXSURCOTraining Collaboration in Practice Certifed NEC Professional Training Course (CNPC-190712) Module 3 ‘iphoto a eh fe ss cold tifing,taedby K SURCO Ld {ity may teu yay or etn ay pa py a ten omit BE SURCO LiBXSURCOTraining Building Winning Teams » Develop Trust through + Familiarity ~ Team Building + Sincerity ~ Beliefs and Goals + Integrity ~ Honesty, Respect, Fairness, + Competence ~ Ability, Skils, Experience, Resources ‘+ Humanity ~ Understanding, Listening, Compassion + Open Mindedness - Flexible and Adaptable + Dedication ~ Driven to Attain Goals “ BeAsiorainc OF Keys to Successful Collaboration + Create value for partners + Better Project Outcomes + Complimentary Sls + Competence and Seif Motivation ge + No Conflicts of Interests STRATEGY. + Equivalent Bargaining Power : + Sets Goals, Measures and Rewards Success + Be prepared to speciy favourable terms + Both sides need to benefit + Getting people to make collaboration happen . BensiaracticO® Ceried NEC Professional Tralning Course (CNPC-190712) Maule 3 ‘cory tie oe ov ra he i the owe oe tig ei BK SURCOBXSURCOTraining i NEC - The Bigger PARTNERSHIP Collaborative Picture oy tO AED » Lean Construction - Reduce Waste » Value Management - More Options » Project Risk Mitigation - Plan and Manage » Expected Decision-making - Faster, Better Decision= » Integrated Project Teams -BIM » Long Term Framework Contract ~ Continuous Improvement » Employer Engagement wth Supply Cain -Petabication » Optimising Project Outcomes > Lower Cost, Higher Quality, Inereased Poftabilty : Beasranc OS BéAsiaPacific @ Module Three Thank you for Attending CCertied NEC Profesional Training Course (CNPC-190712) Module 3 ‘Stony often neat ih eft accede a ning, eed by BK SURO Ll ‘Site tytn iy wy ny pb play i en emi BE SURO LiBXSURCOTraining BuAsiaPacific@ © NEC PRO Presented by Dr. Brenda Yip PRO MIKE MHS MRICS MCIOB MHKICM MCICES RPE » Day One | Module 1- Introduction, Roles, Responsi ‘Module 2 - Preparation and Project Set Up = Day Two | Module 3 - Collaboration & Team Integration ‘Module 4 - Project Administration ities » Day Three | Module 5~ Risk and Programming Module 6 - Lump Sum and Target Cost }» Day Four | Module 7- Management of change Module 8 Accounts and Project Closure BiAsiaraciic@ § | CCertied NEC Professional Training Course (CNPC-190712) Made 4 [Stop ft ae, a hi the mas ele a ‘the ay eee ny yey py we |BXSURCOTraining ~ a. MODULE 4 ~ Project Administration m Bisa OS Module 4 - AGENDA Besiaracc OS ‘Certied NEC Professional Training Course (CNPC-190712) Modi ¢ tho ein en re tin. rnb SK SURO Eid ‘Sny myn oeaed mny y t ypable py wine ritnperminion of SUREDBXSURCOTraining ‘What does this mean for those working on an NEC Contract ? : Bersleractic OS | raining Course (CNPC-190712) Module thesia eto one in tinged ete by BE SURCO Lk ‘ty myers na yen iby woe ite pein =f BK SURED LaBXSURCOTraining General provisions » Actions (Clause 10) >» Shall act as stated in this contract + obliges parties to do everything the contrac states, nd » Ina spirit of mutual trust and co-operation + recommended in the UK Latham Report + underpins all NEC contracts and lauses + covers obligations and attitude, and sets tone + Teamwork. trust openness and respect + Some question legal interpretaor/entorceabity? + Mos practitioners weleome this change : pension OF General provisions - Identified / Defined Terms - Clause 11 1» 1LL- Identified terms Identified terms for contract specific items where entries are fequired in Contot Data are expressed in tales eg Clause 122 "in ofthe contract (C01 p79 tem 5) + 112 Defined terms [Teams for which definitions ae included inthe contrat, are ‘capitalised and defined n clause 122 "11.20 Accepted Programme + 1122) Completion ‘Option-specific definitions are included in the various main ‘option contract sections + 112(21) Activity Schedule [Option A} . BeAsiaractic OS Certified NEC Professional Training Coutse(CNPC-190712) Module ¢ ‘Scop ony ara a ft sisal et ning, td by BE SUIDBXSURCOTraining 11.2(2) Accepted Programme ~ may be identified in tender at CD2p92 or issued for agreement by Contractor within ‘the acceptance within the period stated at CD1p80 11.22) Completion. +» Completion has to be defined under the NEC contract >> No practica/substantial completion ‘Certed NEC Professional raining Course (CNPC-190712) Module 4 (copyright ine tinge ee by BK SURCO Ll {ny my nba ya nog pi Sy wae sem of SURED EaBXSURCOTraining » 11.2) Completion Date ~ Can be defined by Client at 180, oF by Contractor at CD2p92 and can change due to Compensation Events/Acceleration etc + 11.2(4) Contract Date When contract came int existence + 11.2(6 Defects Defined by Scope, Contractor Design, law » 11.207) Defects Certificate - Statement by Supervisor ofthe status of Defects notified before the defects date » 11.266) Early Warning Register. «It isa pre and post contract risk management tool which identifies project risks for tender planning and pricirg purposes and post contract management Bensiaractic@! Certified NEC Professional Training Course (CNPC-190712) Module 4 Scop often ne hee ih fe srs waved are ens ising ied by SURCO La ‘Si tny yt pe yw oF wins pe Spy tt he wien erin oD SURCD LaBXSURCOTraining Pi ec a) General provisions - Defined terms + 112(8) Equipment - Temporary works, plant. vehicles, consumables, tools, utting, etc used to Provide the Works but not forming part of the permanent works » 11.2(10) Fee - Payments for cost reimbursable contract ‘options C- F and all compensation events are on a Defined Cost plus fee basis. Fee covers all costs not in Defined Cost together with Contractor's profit and allowances for risks (621) BeAsiaraciic OS De crc a) General provisions - Defined terms + 11.2(11) Key Date - Multi-contract projects are coordinated through use of Key Dates (CDp78), by which time stated Conditions have to be met 11.2(12) Others - Organisations who are not named in the contract, their representatives or subcontractors » 112 (13) Parties ~ Client and Contractor » 11.2(24) Plant and Materials- Items for incorporation in the works (era . BiAsiaPaciic@§ | (Certined NEC Profesional Training Course (CNPC-190712) Modu 4 Scop fe a nt estore in oo ainigd iby BK SURED Lad ‘yay eel nay yee my apy wine i pom SURED LaBXSURCOTraining » 11.2(15) Provide the Works Importance + Contractor's main obligation isto Provide the Works + Not ust the physical work onsite but all other matters referred toin the Scope + For Reimbursable Cost under SCC or SSCC "An amount is Included... only fits ncured in order to Provide the Works.” Bensinsctc OF a ed Terms ee Defined Terms — : Certined NEC Professional Training Course (CNPC-199712) Mod 4 (Scop fae mans nea ef et af ania ei by BK SRC La ‘ny mo neronad ny ay aed ypble py iw wen permis of BK SURED LiBXSURCOTraining Scope » The Scope ( NEC3 Works Information) is the most important contract document the Client writes '» The Scope isa defined term, which * Specifies and describes the works + States any constraints on the Contractor » The Contractor is required to Provide the Works in accordance with the Scope The pricing document (BQ or Activity Schedule) is not Scope, so cannot describe requirements or constraints : BeAsioractic S| the Client ~ referred to in CDip79 oe » But Scope may also be provided by the Contractor for any of the design work he is to carry out ~referred to in co2p92 » Whoever provides the Scope + The Contractor is required to follow itand if he does not do 0 that wl be Defect * Only the Project Manager (or somebody delegated by him) can changeit : Bens OF Certified NEC Profesional Training Course (CNPC-190712) Maule 4 {coi tse ms no a ea ofthe ut noe i a gn ie BK SURCO La ‘ety ten ny yd iy pa apy it etn pm BE SURED LaBXSURCOTraining : Besta OF ‘Site Information = + The Sit Information is defined in the contract 11.2(18) and the document ing it must be listed in CD1p79. » Its purpose isto describe the site and is surroundings » Bxamples = Soils reports + Surveys of existing buildings + Asbullt drawings for existing structures + Service drawings [_arr (Certined NEC Professional Training Course (CNPC-190912) Moule 4 ‘con fea eno iif tr acon’ hin ried eine BK SURED La Sosy unto ny ay ud ype ay at ten pri of SUC LiBXSURCOTraining Ge jeneral provisions - Defined terms » 11.2(20) Working Areas ~ those parts of the working areas defined in CD2p91 which are + necessary for providing the works + used only for the contract works Important for Defined Cost assessment * BeAsiaractic OS Dc re ocr General provisions - Defined Terms 11.221) Activity Schedule + Identified in €D2p92 for Options A&C » Option A= used to calculate the Price for Work Done to Date (PWDD)~ i.e what the Contractor gets paid + Option C— used to calculate the “target” ~ itis only used at the end ofthe project to calculate the Contractor's share +The Activity Schedule is nt Scope or Site Information. t is only a payment tool and cannot be used to describe what should be built ; Beasrasnc OS Certified NEC Professional Training Course (CNPC-190712) Made 4 ‘cep oe at rw i th swine en ae inte ein BK SURCO La ‘Shy may stb mated yy ed nay pe gy i een pos of SURCOBXSURCOTraining Defined terms Bill of Quantities Clause 11.2(22) The Bill of Quantities » Identified in CD2p92 for Options B& D » Option 8 —used to calculate the Price for Work Done to Date (PWDD) — ie. what the Contractor gets paid = Option D - used to calculate the “target” itis only used at the end of the project to calculate Contractor's share ‘As with all Main Contract Options, changes, called compensation events, are not valued using the Bill of ‘Quantities ~ use Defined Cost plus Fee » Bill of Quantities is not Scope or Site Information. It is only ‘a payment tool and cannot be used to describe what should be built * Beasiaraciic OS EY General provisions ~ Defined terms + 11.2(23,2425) Defined Cost - reimbursable cost under ‘he contract forthe purpose of + Changes for Compensation Events under options A&B "Interim and Final pyments nd Compensation event uncer options cto F + Thee definitions (A8B(23},C to £24, FS) + 11.226,27 Disllowed Cost ~ costs which PM decides are + not justified by the Contractor's accounts, or” - y + should not have been psd tas or supplier, oF * because of fale to follow procedures because of fale to follow early warning + §/€ costs for work Contractor should do (Optio F 7) : Binsin OE Certied NEC Professional Tralning Course (CNPC-190712) Module # ‘Scorpion ssh it srs lode nig el by BK SUROO La ochy anys ay wa ered ay apy ote wn pri af BK SURED iBXSURCOTraining General provisions — Defined terms +» 11.2(27,28,29) The Price for Work Done to Date (PWDD) ~ “the amount due for payment based on the total of Prices for + Completed Activities, Option A (27) + Completed Quantities at BQ rates for Option B(28) + Total Defined Cost incurred plus Fee for Options C+ (29) + 11.2(80,31,32) The Prices — breakdown of the contract sum + Lump sums for each ofthe activities, Options ABC (30) + Amounts obtained by multiplying BQ quantities by rates plus lump sums, Options B&D (33) + Defined Cost plus the Fee, Options E&F (32) » 11233 The Total of the Prices ~ final amount for payment Option 8 * BeAsiaPacific CF General Provisions — Authority of PM. Clause 12 - Interpretation and the law » Restricts PM Authority for issuing changes to those ‘expressly set out in contract. Other changes require written approval from Client Beasiapactic@S Certified NEC Professional Training Course (CNPC-190712) Move 4 ‘Scimyii oe nas ns hee ip ee norte eine ot ining, rei y BK SURCO Ld sn moter yy ely Sg weno ripe =f BK SURED LaBXSURCOTraining General Provisions Communications User Guide: says this includes “ a document sent by post, telex, cable, electronic mail, facsimile transmission, and on dic, ‘magnetic tape or other electronic means. Pear neae anal General provisions - Communications Communications (Clause 13) + Must be ina form that canbe red, copied & recorded (13) » Must be inthe language of this contract (in CD1p79) » Contractor should therefore only undertake works instructed in writing by the PM or authorised representatives + Replies by Contractor or PM within period for epi CO1p78) or as otherwise tated in contact (13.3), usualy 2 weeks + PM to give reasons fhe doesnot acept a Contractors submision (further info) if non-acceptance for reason nt in contrat then Contractors compensated (134 8 6019) + Notifications required by contact, (eg, Compensation Events to be communicated separately (13.7) ei Behsiaracic OE ‘Certited NEC Profesional Training Course (CNPC-190712) Module # rete, hh 0 an and hac age eid by BK SURCD La ‘nny my mabe ee ny ey ree abe dy tote wn prison af A SURE a “4BXSURCOTraining 7 prejed uahioe EMINEM EEE Ce + Responsible for communicating wit he Contato in Accordance wth he contract pronisions + PM issues all instructions related to the works issues approvals and acceptance except defects) and deals wi aifinancalissies V1 oweope aciyn fom PM must be even handed in matters sich a assessing payment ~ PMis only person who can instruct changes to Scope or key fates (ote 123) + Supervisor's responsibility is checking compliance with the Scope inspecting and testing A Brean OG e BeAsrnstcOS CCeried NEC Professional Training Course (CNPC-190712) Module $ [Staph fen, as aa hei teu wwe en nani rei BK SURCO Lt ‘yoy pda nay yee ay te apy wow ran pmo of BE SURCO LiECC = Project Administration + NEC Manager clbortv extranet Combinations of tlre contact forms and sroione «= Siti contact forme onine t© prompt 2 ‘toitow and ssocted eons + Tatbractce Note AG72 rls ous of stable Seftneappleations fr amination General Provisions Clause 15 - Early Warnings » Early warning (Clause 15) -a vital part of ECC » Contractorand PM have a duty to notify the other as, s00n as they are aware of a matter which could + increase the total ofthe Prices * delay Completion, + delay meeting a Key Date or * impair the performance of the works in use (15.1) » PM enters early warning matters in Early Warning Register (15.4) » Early Warning Meeting convened » Usually but not always a pre-compensation event process Behari OE ‘Certied NEC Professional Training Course (CNPC-199712) Module ¢ [Scoryh of tse mr, nts eis oe weed rt wing eine by 3K SURCO La ‘ny ym nnd in ay ed yb iy te Wn pms of SURED LiBXSURCOTraining ‘to reduce amount paid by Client + Client responds with 4 weeks either ' Accepting proposal and issues instruction + Informs proposal under consideration and requests quotation + Does not accept + Ifaccepted then is evaluated as a CE either (A&B) at the quotation price x value engineering percentage (63.12) (CD1p82) or (CBD) at zero adjustment to prices(63.13) 5 Besar @$, CCertited NEC Professional Training Course (CNPC-190712) Modul 4 pig tna a is i we gh he toy peed arn at get ein BK SURCO hy myst mc yo nay py ito ie wen pre 0K SURED LaBXSURCOTraining Li ne 2- Contractor's Main Responsibilities 20 - Providing the Works 21 - Contractor's Design 22-Using the Contractor's Design 23 Design of Equipment 24~People 25~ Working with Client and Others 26 ~ Subcontracting 27 - Other respon: : Bisa OS | SR SL Contractor's Main Responsibilities » Providing the Works (Clause 20) + Contractor Provides the Works in accordance with the Scope + Contractor advises on the practical implications of the design and subcontracting arrangements (Options ¢to F- 20.3) + Contractor provides forecasts of total Defined cost together with information on changes at intervals sat fut in CD (Options C to F- 20.4) . BeAsiaractic OS 18BXSURCOTraining * Contractor designs the parts of the works which the ‘Scope states he isto design + Default is: ient design + Design acceptance by PM for specified items in Scope before proceeding (Clause 21.2) + See Guidance Notes P.22 + Reasons for not accepting design should be provided * BiAsiaracitic OE Contractor's Main Responsibilities People (Clause 24) » Contractor employs each key person stated in Contract Data or » Employs replacement person accepted by PM. » Reasons for not accepting (24.1) '» PM may instruct removal of persons (24.2) : Besant O& fed NEC Profesional Training Course (CNPC-190712) Module 4 ofthe nas 0 ate ih he tie wn an inane yD SURCO LaBXSURCOTraining BORED: a EE) Contractor's Main Responsibilities Working with Client and Others (Clause 25) + The Contractor has to + Co-operate with Others in providing information which they need in connection with the works ‘Share the Working Areas with Others as stated in the Scope + Provides services and things stated in the Scope. Any ‘costs incurred by Client for non-compliance are {ssessed by PM and deducted from Contractor e BeAsiarosicOE Pe Contractor's Main Responsibilities Other Responsibilities (Clause 27) = Contractor obtains approval of its design from Others where necessary (27.1) + Contractor provides access to PM, Supervisor and Others (27.2) + Contractor obeys a contract-compliant instruction given| by PM or Supervisor (27.3) = Contractor acts in accordance with Health and Safety provisions of contract (27.4) * BeAsiaraciticOE Certified NEC Professional Training Course (CNPC-190712) Module 4 ‘Scepyh tte ne, oe ho mais ie a ea ange etd by BK SURCO LaBXSURCOTraining a General provisions ~ Defined terms » Subcontractor » 11.2(19) Subcontractor a person or organisation who contracts with Contractor to + construc/install part ofthe works + design all or part ofthe works + provides a necessary service + Except hire of plant and people + Can be a consultant working for Contractor Besiorci oF Go oo Contractor's Main Responsibilities Subcontracting (Clause 26) » If subcontracts, Contractor still responsible for Providing the Works, and compliance with actions, notices (26.1) » Contractor submits * name of each proposed Subcontractor to PM for acceptance (252) + proposed subcontract conditions (not pricing for Options ‘A/B) unless [NEC contract is proposed or PM agrees no submission required (26.3) icing information (264, Options C to F) [NB this information is needed by PM to establish Defined Cost (11.25)) 7 Benstrsct OS Certified NEC Professional Training Course (CNPC-199712) Mole 4 (OCinnigh oo ne no ite ph fe mewn ain ne ining, yD SURCO Lad snd steeped yay a ay edgy wt Ge i emi =F K SURCOBXSURCOTrai Contractor's Main Responsibilities ‘Subcontracting (Clause 26) + Contractor does not appoint a Subcontractor until PM has approved subcontract conditions (26.3) Reasons for disapproval include + wil nt allow the Contractr to Provide the Works + no Statement in /C of mutual rust and co-operation + Failure of Contractor to comply with above is grounds for termination by Client (Clause 91.2) NB Contractor requires $/C co-operation for Early warning and Compensation Event process . Besiaractic OS Pare NEC Subcontracting Subcontracting (Clause 26)- User Guide + “The NEC Engineering and Construction Subcontract (or the Professional Services Contract for design work) is expected tobeused..” +» Alternative is NEC Engineering and Construction Short Subcontract for straightforward, low risk subcontracts + For Hong Kong the PM may accept other subcontract conditions » Latest Practice Notes mandate use of HKCA Standard Form, ‘of Domestic Subcontract “where appropriate” (Practice Notes A6.5.24) Bensiaractic OS Certified NEC Professional Training Course (CNPC-190712) Module « ‘Citta wi ia to aw ig ty HSNO LtBXSURCOTraining ECS Contract Options » Engineering Construction Subcontract ("ECS") + Largely identical to ECCin content + 5 Contractor/Subcontractor Procurement Options + Usage undocumented in HK but appear rarely used/ignored + Effectiveness of ECC Main Contract is dependent on /C involvement - teamwork, programming/ progress, early ‘warnings, compensation events. + Makes sense for larger, more complex subcontracts “+ For simpler subcontracts "Short Subcontract” can be used + Client can mandate use of ES through provisions in Scope ‘and ECCS/C approval process BAsiaPactic ECS Subcontract Structure (Certified NEC Profesional Training Cours (CNPC-190712) Module ¢ ‘sas tei of soled er tinged BE SURCOBXSURCOTraining Module 4 - AGENDA 1 ae 2 comin stoi 3-ECC Time Clauses 30 - Start, Completion and key Dates 31~The Programme 32 Revising the Programme 33 Access to the Site 34~ Instructions to Stop/Not Start 35~Takeover 36~ Acceleration ‘Certined NEC Professional Training Course (CNPC-190712) Module 4 (copy ft man eft tema annie nian y BK SURCO Lat ‘ny uy beeen ay ren ay pe yin prs BK SURED Li.Certied NEC Protestonsl Tras BXSURCOTraining LT The ECC Programme + Programme is important tool for managing time and progress under any contre, 7 Vag a + Under NEC, updated programe aso essential to enable proper administration of contract + NEC equites contemporaneous assessment of all cst and time ‘effects of changes which requires regular programme updates = Enables Project Manager and Contractor to monitor progress, prediet project outcomes, and to assess prospectively the time *ffects of CEs, including changes to Completion Date Facilitates accurate time and cost forecasting, eliminates global claims, reduces disputes and shortens final accounts EM nan d : ousruno$ Time ~ Clause 31 Programme + Programme (Clause 31) ~ Cental to operation of ECC 25% of payment can be withheld until fist compliant programme submitted + Prepated by Contractor for acceptance by PM = Can be submitted with tender (C02p92) or post contract (Clause 31) + Programme is accepted by PM and includes (Clause 31.2) sia ey date ‘rer and ining of perations * errand ining of work of Clenand Others provisonforflas tne rick alowncee * foreach operation, astatement ef how Contactorlans to do work ‘enti principal gue and resources * Clear reasons to be given for not accepting (Clasue 31.3) ; Besar OS 4 Course (CNPC-190712) Modul 4 thea ssw ne nig eid by BK SURCO ae 2sBXSURCOTraining = Time — Clause 32 Revising the Programme » Programme has to be updated regularly (Clause 32) » Shows @ number of things including the actual progress ‘achieved on each operation and its effect on remaining work (32.1) 1» How frequent? + on instruction by PM + when Contactor chooses + interval stated in Contract Data (Clause 322) » PM and Contractor Resources ! BeAsiarsciic OE x a Time - Clause 35 Take over +» Take over (Clause 35) is where the Client uses part of the works before Completion, or where Completion occurs before the Completion Date and the Client takes over the works early » Client may state in Contract Data (CD1p80) he will not take over "early" i.e. before Completion Date (35.2) Otherwise, Client takes over within 2 weeks of Completion. » Client may take over part of works before Completion ~ will be a compensation event if before Completion Date (602s) » Contractor is responsible for works until take over : Biasrctic@E Certified NEC Profesional Training Course (CNPC-190712) Module 4 Copy fhe nan as hea eis ests anvil wes ising ited yA SURCO Ll ‘et tey yt pd in yw ly Sg wt fe wie oon OBR SURCD La 6BXSURCOTraining De Nerv une eae tare nia Acceleration - ECC Clause 36 » Acceleration under the ECC means bringing the Completicn Date or a Key date forward » Differs from usage in many contracts where ‘acceleration’ ‘often involves speeding-up the work to counter Contractor delays so as ensure the Completion date is achieved (with NNEC this is achieved under Clause 32.1bp3) » PM agrees with Contractor to submit quotation for Completion earlier than contract Completion Date, Contractor provides time and cost details including a revised programme within 3 weeks of being instructed to provide ‘quotation * BeAsiaracic 6S Acceleration “36.1 The Contractor and the Project Manager may propose to the other an acceleration to achieve Completion Sched 25 unde before the Completion Date. Ifthe PM and Contractor | oy js. are prepared to conser the change, the Project , ‘Manager instructs the Contractor to provide a (quotation... The Contractor provides @ quotation within three weeks ofthe instruction to do so. The Project Manager replies tthe quotation within thee weeks, 362 A quotation for an acceleration comprises proposed ‘changes to the Prices and a revised programme showing the ealer Completion Date and the changed Key Dates. The Contractor submits details ofthe assessment with each quotation. Besar OS CCertied NEC Protesslonal Training Course (CNPC-190712) Module $ imi na tyrant ena inn ny KACO!BXSURCOTraining EL a NNEC Approach to Programme Management + Detailed Programme from the start +» Real-Time monitoring of Project Issues » Early warnings and risk management » Regular programme updates + Contemporaneous assessment of delays + Reset of time obligations to take account of compensable delays. » Goal is time certainty throughout » Ensure sufficient resources available to fulfil contract requirements . Bersih LS 4—ECC Quality Management Clauses ‘40 — Quality management system ‘41—Tests and inspections ‘42 Testing and inspection before delivery ‘43 ~ Searching for and notifying Defects 44 — Correcting Defects 45 — Accepting Defects 46 ~ Uncorrected Defects oO BeAsiapaciic OS CCertited NEC Profesional Tralning Course (CNPC-190712) ‘Stang nn wa if toa ‘stomp bps any ay erie np py ot rt ng cle by K SURCO Lit 28BXSURCOTraining ‘Quality Management System » Contractor required to operate a QMS in accordance with the Scope > Has tobe consistent with obligation to Provide the Works » Contractor provides quality and policy statement within period in CD1p80 for PM acceptance » PM can instruct Contractor to rectify non compliance with aus a Bknsiaractic GS, Testing and Defects » Supervisor's main roles responsibly for conducting tests and inspections on behalf ofthe Client and issuing Defects Certcate » Searching for and notifying Defects (Clause 43) * Search provisions (43.1) ~ Supervisor may instruct + Supervisor & Contractor notily each other of Defects they find 43.2) » Correcting Defects (Clause 44) + Contractor corrects notified Defects before end of defect correction period (442) 09) 85 klone Je + Access required after take over to corect a “|= Defect (44,4) “ ion 7 Bestar OS Certified NEC Professional Training Course (CNPC-199712) Module 4 epi then emt of tn anid en ot ity BUCOBXSURCOTraining Completion and Defects a nmr Poe to Was tape nd EE a) ~ Scan cannes Gea a > oe - a BeAsiaractic OS ~ Vetere Cove _ ee Testing and Defects » Accepting Defects (Clause 45) + Proposals may be made that Defect nat be corrected (45.1) + Contractor quotation for reduced Prices and/or ealier Completion Date (252) » Uncorrected Defects (Clause 46) + Contractor pays where Contractor has not corrected Defect within defect correction period + PM assesses cost and Scope deemed to have been changed * Retention needs to be adequate (Option X16) Bessie OF Certified NEC Profesional Training Course (CNPC-190712) Module 4 prt ties mae he i emo np ane ing dy BK SURO LlBXSURCOTraining 5 ECC Payment Clauses 50 ~ Assessing the Amount Due 51- Payment 52 Defined Cost 53 - Final Assessment . BeAsiorantic 6G nes Payment — Assessing Amount Due » The Project Manager = the PM assesses amount due at assessment date (50:1) * considers any application for payment Contractor has submitted (50.2) + if Contractor does not submit an application then ‘amount certified is paid the lesser of the amount due and the amount due at the previous assessment (50.4) + gives Contractor details of assessment (51.1) + acts as an independent certfier - BkAsiaPactic OS Certified NEC Professional Trainng Course (CNPC-199712) Made « ceri tt noe, ne teh fhe es ge i i lg iy BK SURCO Lk ‘nd tert eps my yn ay pa ay it smo of HE SURCO LiBXSURCOTraining TERMI cana aR Payment — Assessing Amount Due » Assessments made at assessment interval (CD1p80) (usually monthiy) » Amount due is Price for Work Done to Date (PWDD) plus/less other amounts e.g. retention, delay damages, KPIs (50.3), » 1/4 PWDD retained if there is no first programme (50.5; » There are no provisional sums or PC sums . BeAsiaPachic OE a ame Taaaral Payment ~ Assessing Amount Due PWDD for each Main Contract Option eee) Total of ries fr complete activites (rom setty schedule) 11229) & CD2992 & Compensation Events Quantities of completed work at 89 rates and ‘proportions of lump sums 11230) & C2952 & Define Cost forecast tobe paid before next assessment date + Fee 11.210) & 122(28 11.231) Besiaracc OS Certified NEC Profesional Tralaing Course (CNPC-190712) Module 4 ‘copy aa ma ns ath te tr nee en tinge ein by 3K SURCO ‘oy myn oeed y y e iay pa th ies oman SURCO Li EsTomasy kee Re gemeen mda reo cave bak | BO ruBXSURCOTraining Auditing of Cost reimbursable Contracts » All cost reimbursable contracts wl equire regular fnudting of Contractor Costs +» D0 QS's have the required sil? » Accounts should be open book but note commercial ‘and personal privacy issues particulary with salaries » Usually sample basis, perhaps 10% extended if difficulties encountered Frequency monthly/quarterly » Clear protocols required in Scope ~ see latest Practice Notes pages 58 -91 (A6.2) » Consider use of electronic data capture . BeAsiaracic GE, Er Auditing of Cost reimbursable Contracts + Special attention needs to be paid to + Levels of site Resources SCC Preamble + Materials Wastage + Subcontractor Procurement + Company /Group Discounts ~52.1 + Intergroup Plant Charges - Open Market Rates SCC 22 + Disallowed Costs 11.2025) + Providing the Works ~11.2(13) : Bersaraaic OS Certified NEC Professional Training Course (CNPC-199712) Mol 4 (copy eats we i os wi in ae tng eed by SURCO al ‘ny me orb et my wa las pi day a es race of SURED Ea 3BXSURCOTraining Payment — assessing the amount due ~ what is the Fee in Option C to F?, » The Fee (11.2(8) is caleuloted by applying * + dvect fee percentage to Defined Cos of other work » All Contractor's costs not included in Defined Cost are treated as included in Fee (52.1 » Fee also includes profit and risk allowances Men ite Ieetclesi BeAsiaPacic@ Ceried NEC Professional Training Course (CNPC-190712) Move ¢ [Scope ft nn rs ei fe to afd iat ip iby BK SRC La ‘yay erp ay ay td pb pay iets pra of BK URC LiBXSURCOTraining 6 - ECC Compensation Event Clauses 60 - Compensation Events 61 — Notifying Compensation Events 62 ~ Quotations for Compensation Events 63 ~ Assessing Compensation Events 64 ~ Project Manager's Assessments (65 — Proposed instructions 66 - Implementing Compensation Events . Benson OS, xc -Compensation Events - Definition” » Compensation events are events which if they do not arise from Contractors fault, entitle Contractor to be compensated for effect on the Prices, Key Dates and Completion Date » Therefore itis important to remember that compensation ‘event claims and assessments must deal with both time ‘and money ( no separate disruption/ global claims) » Prescriptive timeframe for dealing with CE’s prospectively sing forecasts of cost and time effects = Only one regime for time and money claims. Remedies for CEarerestnted to entitlements to changes in Prices, Completion date and Key Oates Cause 3.6) . Bitsaratc OE Certified NEC Professional Training Course (CNPC-199712) Mode ¢ (cenrip of ent whe pt fe mt ante eine inngsd by BSURCO ta 35BXSURCOTraining Ceried NEC Profesional Tra ho hry mo re ER Module 4 - AGENDA > ne By See BeAsiapacc OE Title 70 ~Title to Plant and Materials 71 Marking Equipment outside the Working Areas, 72 Removing Equipment 73 - Objects and materials within the Site - BeasiracheOS 36BXSURCOTraining Title > Whatever title the Contractor has to Plant and Materials which are outside the Working Areas passes to Clint i the Supervisor has marked them as for the contract (702) + Contractor removes Equipment from site when not needed, unless PM allows to be lft inthe works (72) » Objects and materials within Site (73) + PMinsrets how to dea with objec of vale o historic or other intrest 33) + Contractor haste to materi from excavation & demotion unes the Scope states athens 73.2 . BeAsiaracitic GS Liabilities and Insurance 0 Cian’ iabilties £81- Contractor’ abilities 82= Recovery of coats a+ benea Cover 24--Insurance Plies 85 ~ Contractor not Insuring 86 —Ieurance by Cent 28 Limitation of ably : Bersih OS | (Certined NEC Professional Training Course (CNPC-190712) Module + liane, rnd BK SURCO LitBXSURCOTraining he) Liabilities and Insurance + NEC distinguishes between tsk of loss or physical damage ‘to property or of personal injury or death which are usually insurable risks, from general, legal or financial risks » Clause 8 identifies the general, legal and insurable risks of loss, damage, injury or death for which the Client is. responsible and insurances required to cover these + Risks which are not expressly stated to be Client risks are Contractors risks ‘Additional Client liabilities can be added in CD1p82 (CE! + Contractor has to carty out repairs to Works arising from Client's liability event which will be a Compensation Event (014) n Bensarecti oS Liabilities & Insurance » Clause 80 Client's liabili = Damages arising from + Use/occupation of the Site for the works + Negligence of Client/ Client's staff + Client’ design in Scope or instructed += Loss of Client's materials not received by Contractor + Loss or damage to works due to war, rot ete + Loss or damage to works taken over + Loss or damage to plant/equipment/material retained by Client after termination + Any additional Clients liabilities stated in CD1p82 - Benicio Certified NEC Professional Training Course (CNPC-190712) Module # ‘Sin oem, nt ii fe te ang cae tig, cil DK SURED La ‘iter yet bree ty wy te i pb gay wot tn pm oF BE SUREDBXSURCOTraining a ee ce ‘abilities and Insurance » Clause 81 Contractor's liabilities + Claims, compensation and costs payable to Others arising from the Contractor Providing the Works + Loss or damage tothe works, Plant, Materials and Equipment + Loss or damage to property owned/occupied by the Client arising from Contractor Providing the Works + Personal njury to Contractor employees : Beare eS Termination 90-Termination- xs Le ene OM 91 - Reasons for termination noe 92 ~ Procedures on termination 93 Payment on termination 7 Bersirasne OS Certified NEC Professional Training Course (CNPC-190712) Madu 4 (©Crown ane ingen y BK SURCO LaBXSURCOTrai Termination » Reasons and Procedures and Amounts Due set out in Termination Table (90.2) » Contractor + Insolvency of Client (R1-10) + lent not having paid a sum due within 13 weeks from payment due date (R16) + Released from performance at law (R17) + Stop work order issued due to reason which is not due to Contractor default and work not restarted for 13 weeks (R19,20) » Client + Due to any of 20 reasons stated + For any reasons (if X11 selected) ; BeAsiroctic OE EATS Ae) ECC Dispute Resolution » Option W1~ Adjudication 20 wi » Option W3 ~ Dispute Avoidance Board » The Tribunal e Beslan CCerifed NEC Profesional Training Course (CNPC-190712) Module 4 [Soni en 0 8 ei fe se wtp hc tig, ed y BK SURCO LeBXSURCOTraining BeAsiaPachic GS Option W1 - Adjudication WL - Resolving disputes AA dispute may be referred to the Senior Representatives by a party within the period stated in the Dispute Reference Table, Each party submits no more than ten sheets of A paper ‘together with supporting evidence, within one week. ‘The Senior Representatives attend as many meetings and use any procedure to try to resolve the dispute within three we If the dispute is not resolved, itis referred to and deci by the Adjudicator. Option W1 - Adjudication W13—The Adjudication ‘A Party disputing any issue not agreed by the Senior Representatives issues a notice of adjudication to the other Party and the Project Manager within two weeks” of the production of the list of agreed and not agreed issues or when it should have been produced. The dispute is referred to the Adjudicator within one week of the notice of adjudication, The Adjudicator decides the dispute and informs the Parties of the decision and reasons within four weeks. If still disputed then referred BKAsiaPactic GE ey wo tes onan of BE SURCO eed hi we tings ied by BK SURO Las 41BXSURCOTraining Dm Option W1 - Adjudication + Final decision is made by tribunal + Arbitration, or + Litigation » Can‘t use tribunal until after Adjudicator makes decision A BeAsiaracnc | Test a ae TLE Ne on ooea Option W3 - Dispute Avoidance Board » One or three members » Assist(s) parties in resolving potential disputes » Potential disputes referred to DAB within four weeks » DAB reviews and helps parties settle them = IFunable to promote a settlement makes a recommend: » If still disputed then referred to tribunal “ BeasiaraciicO fessional Training C (€NPC-190712) Module 4 ths oid en amt ino dW BE SURCO Lat ay wit wn prison BK SUC Lt 2BXSURCOTraining NEC PRO NII ° Module Four Thank you for Attending parse (CNPC-190712) Module ¢ ip a i i ei th ge nnn en indy K SIRO it[INE Pro Certified Training ~ Case Studies Workshop Exercises ~ Day 2 Immediately prior to a concrete pour, the Supervisor sends a Wrattsapp message confirming a verbal instruction to the Contractor's site foreman to make adjustments to reinforcement bars on ste prior to concreting. The Contractor’ site manager is told of the instruction but, since it does not comply with his Company’s QA procedures, ignores it and completes the concrete work using the original reinforcement configuration, so as not to delay the works. f mutual trust and co-operation? Was the Contractor right, and did he actin a spi Suggested Points for Consideration + Clause 10.2 requires the partes to actin accordance with the contract and ina spirit of mutual trust and co-operation. Good communications are fundamental to fulfillment of this obligation, and clear protocols in respect of electronic communications and site-level and time-critical instructions should be established at the outset ‘© Clause 1311 states that all instructions shall be communicated in a form which can be read, copied and recorded. Verbal directionsfinstructions therefore should be confirmed if they are to be contract compliant. However, the verbsl instruction was followed by a Whattsapp message. Does this satisfy the requirements of 13 or is it ineluded as part of the communication system specified in 13.2? + Clause 14.2 permits the delegation of the PM’s duties upon notification, Has the PM delegated his authority to the Sin respect of instructions? ‘+ Clause 14.3 permits the PM (but not the Supervisor to issue instructions changing the Scope. Does the instruction alter the WI, or is it the correction of a Defect, in accordance with Clause 44.12 + Clause 27:3 requires C to obey an instruction which i in accordance with the contract and given by the PM or Supervisor Ifthe instruction is contract compliant, Chas not done so. If this is the case then C may either be required to demolish the affected concrete works, or PM may accept the defective works upon receipt ofa quotation for reduced Prices or earlier completion. ‘+ Clause 41.3 requires the Contractor to notify the $ in time for any inspection to be done, Was this procedure complied with and is it in accordance with the Accepted Programme? + Ifthe instruction is not contractually compliant but still necessary, then subject to any agreed protocols then given the ramifications the C should have confirmed the matter by issuing a confirmation, together with an early warning ofthe likely impacts of the instruction, Not to do so is contrary to the requirements of Causes 10.2 and/or 15.1. BeAsiaPacific @ & :‘NEC Pro Certified Training ~ Case Studies ‘Workshop Exercises ~ Day 2 ‘Module 3 = Communication and Mutual Trust and Co-operation Immediately prior to a concrete pour, the Supervisor sends a Whattsapp message confirming a verbal instruction to the Contractor's site foreman to make adjustments to reinforcement bars on site prior to concreting. The Contractor's site manager is told ofthe instruction but, since it does not comply with his Company's QA procedures, ignores itand completes the concrete work using the original reinforcement configuration, s0 as not to delay the works. Was the Contractor right, and did he actin a spirit of mutual trust and co-operation? BiAsiaPacific GE 1NEC Pro Certified Training — Case Studies Workshop Exercises ~ Day 2 ‘Module 3~ Programming and Mutual Trust and Co-operation ‘The Contractor submits his fist programme within the timeframe required by Clause 31 but it is rejected by the Project manager who simply stats in his writen response thatthe programme does not provide the appropriate level of detail. The PM then deducts 25% of the Contractor's due payment. Is the PM acting in accordance with the Contract? Is he acting ina spit of mutual trust and co-operation? What should happen? ‘+ Clause 31.1 states that C will submit frst programme within period set down in CD. ‘This has been complied with. + Clause 31.2 provides the nature and extent of detail required. + Clause 31.3 lists the reasons for PM not accepting a programme. These are + the Contractors plans which it shows are not practicable + itdoes not show the information which this contract requires + itdoes not represent the Contractor’ plans realistically or + itdoes not comply with the Scope ‘+ Withholding an acceptance fora reason not stated in the contract isa CE (602.19) + The reason provided by the PM although not worded in precisely the manner required by the Contract arguably could be covered by Bp2 or 4. This is unclear and should be clarified by the PM, in order that Cis able to address the PM's concerns. ‘This is particulary the cas since this could lead toa payment sanction under Clause 50.5 ora compensation event entitlement under 60.19). + Failure fo provide the required information to assist C, is inconsistent with the PM. acting in a spirit of mutual trust and co-operation as required by Clsuse 102. The PM could have agreed an extension tothe submission period ora joint working meting to enable C to understand the PM's requirements, rather than simply rejecting the programme, + Clause 13.8 provides for the PM to be able to withhold acceptance ofa submission. If he does so for a reason which is not stated in the contract then this may be a compensation event, however it is not outside the contract. ‘+ Clause 50.5 requires the PM to deduct 5% of payments due, until Chas submitted a first programme for acceptance showing the information which the contract requires, in ine with Bp2 of Clause 31.3. Therefore, provided that the programme is compliant with Clause 31.2, then notwithstanding the PM's assertions regarding lack of detail, the PM will not be permitted to withhold 25%. BeAsiaPacific @F& :"NEC Pro Certified Training = Case Studies Workshop Exercises - Day 2 ‘The Contractor submits his frst programme within the timeframe required by Clause 3, ‘but it is rejected by the Project Manager who simply stats in his written response thatthe programme does not provide the appropriate level of detail. The PM then deducts 25% of the Contractor's due payment. Is the PM acting in accordance with the Contract? Is he acting in a spirt of mutual trust and co-operation? What should happen? we, - a) ee ae , BXAsiaPacific GS 2Workshop Exercises — Day 2 ‘Module 3- Compensation Events and Mutual Trust and Cooperation fon Peset ‘A compensation event was implemented atthe outset ofan Option D project for 1KS250,000 (additional fencing). Through open book auditithas been revealed thatthe Contractor obtained some betterment when purchasing the materials (isos him HIKS150,000) The Project Manager is now threatening to withdraw approval to pay. ‘What does the Contract require? How would you establish mutual trust and co- ‘operation? Clame 66,0 ¢ 66.3 Chl Conteh shad 63h, OY Oper O0~ PWPD, & PM nw rudd % fog wrt te etan f 90 CR Carine om yor ry of Te cimeel 2 AK HIT, 00° — 1b optin 1, ARS 150, 029 watt bee paca C16 - 60.1 0-7) BéAsiaPacific @ &| NEC Pro Certified Training ~ Case Studies Workshop Exercises - Day 2 “Module 3- Compensation Events and Mutual Trust and Co-operation ‘A compensation event was implemented atthe outset of an Option D project for 1HIK$250,000 (additional fencing). Through open book audit it has been revealed that the Contractor obtained some betterment when purchasing the materials (tcost him HK$150,000). The Project Manager is naw threatening to withdraw approval to pay. What does the Contract require? How would you establish mutual trustand co-operation? ‘Suggested Answer ‘The assessed value of the Compensation Event (CE) will have been calculated in accordance ‘with C1.63.1, based upon a forecast ofthe cost of resources required to complete these works including allowances for contractor risk and an addition for fee, Altematively, they would ifthe parties had agreed, be based upon rates and prices in the BQ. Since this is a Target Cost Contract the interim payment for the fencing works will not be based upon the agreed CE value but instead will comprise the actual cst ofthe additional fencing works plus the fee. It should be explained to the Client that there will almost always be « difference between the agreed forecast value of the compensation event and the actual cost. The CE value represents a cost forecast, estimated in advance and is based upon the information available to the PM at the time of assessment. Further the PM is contractually obliged to includes likely contractor risks, some of which may not materialise. Both patties to an Option D contract share the risk of actual and forecast cost differences through the pain/gain share ‘mechanism. Additionally, itis to be expected that the Contractor will seek to make cost savings in both the original contract scope and also for scope changes instructed during the course of the ‘works, in order to generate a better financial outcome for both parties. However, unless the CE is based upon PM assumptions (see C1.60.1(17) which later turn out to be wrong, then the CE will not be adjusted downwards or upwards to take into account actual circumstances and costs The difference between the forecast value of the compensation event plas fee and the actual total cost of the compensation event works plus fee will, at the conclusion of the project, form part of the Contractor's share calculation in accordance with C1546, BXAsiaPacific GE ‘Workshop Exercises ~ Day 2 “Module 4~ Acceptance of Subcontractor ‘The Contractor submits the name of a proposed Subcontractor and its subcontract for ‘acceptance by the PM in accordance with Clause 26. The PM refuses to accept the Subcontractor because he has heard on the rumour thatthe Subcontracter is unreliable. Is the PM justified in refusing to accept the Subcontractor in this way? What else could have been done? BiAsiaPacific @&"NEC Pro Certified Training ~ Case Studies Workshop Exercises ~ Day 2 Module 4— Acceptance of Subcontractor The Contractor submits the name of a proposed Subcontractor and its subcontract for acceptance by the PM in accordance with Clause 25, The PM refuses to accept the Subcontractor because he has heard on the rumour that the Subcontractr is unreliable. way? What else could Is the PM justified in refusing to accept the Subcontractor in hhave been done? ‘Suggested Points for Consideration ‘+ The PM must reply within the period of reply (CD1p66) with his reasons for refusing to accept a proposed subcontractor, + Clause 26.3 sets out the reasons for the such a refusal. These ae: © The appointment or the proposed subcontract documents will not allow Contractor to Provide the Works © The proposed subcontract documents do not include a statement that the parties to the subcontract shall act in a spirit of mutual trust and co- operation. +The PM may still refuse to accept submission by the Contractorforother reasons, Dut this can be a compensation event in accordance with Clause 60.19 + Notwithstanding the fact that the PM has concems regarding the proposed subcontractor the primary responsibility for selection is with the Contractor and itis he that retains overall responsibility, even after acceptance by the PM. The PM. should exercise his power to withhold acceptance only where he is able to back- up any reservations that he has with objective reasoning, ‘In this case, the PM should in the first instance seek to validate the concerns that have been raised, and if validated should inform the Contractor of his concerns so that they may be discussed and appropriate action taken. Ifthe grapevine rumour cannot be evidenced in a tangible form then, whilst it could be informally mentioned to the Contractor it should be disregarded as fer as contractual acceptance criteria are concerned. + The PM should also complete the necessary contractual die diligence by requesting from the Contractor information related to the proposed subcontract documents and statements regarding mutual trust and co-operaion, in order for PM can be satisfied that the proposed subcontract conditions are contract compliant. ‘+ The Client is free to include additional requirements for subcontractor selection in the Scope, such as approved lists / project track record financial criteria ete should this be required, BuAsiaPacific @ & :‘NEC Pro Certified Training = Case Studies ‘Workshop Exercises ~ Day 2 Module 4 Bills of Quantities ‘Under an Option D drainage done by a subcontractor should have been divided into different classifications of depth in accordance with the method of measurement (but was not). The Project Manager is arguing that this is not a compensation evert as nothing had changed in terms of quantity and the drainage has not altered from the criginal drawing. ‘What does the Contract require? How would you deal with the situation? Suggested Points tn Consider ‘+ Underan Option D contrac, the Bll of Quantities isa Defined Term t 1.2022) ‘This refers to CD2p92 where the Bill of Quantities is identified. + CD1pS2 identities the method of measurement. + Clause 604 requires the PM to correct mistakes in the Bills of Quantities such as D BXAsiaPacific GS| NEC Pro Certified Training ~ Case Studies ‘Workshop Exercises ~ Day 3 Actions arising from Early Warnings? at Event FatonRoe 1 | coc dco te pig | Eg Be mates nde wa Thorns ase par tat see Ors | cre Wopion cet esens mone apes Sos tees ee ene Soe ae beeen 7] Rasta opening ea page| nde Tig farton spon Seuwegerenrsanae cesar syne | mami sticnane tone sealants 3] eet et sce pee | i polytape mane me emtoccia eearpgeoae = [Re ag seer 6 ry ang | ete I pnt mg pada aaah a rm a lac silage 7 [prot ome eds ox amanda | SSL gana pat ae heal are ped | snout agen team Thaeontencaiogacincer | Suretsale uenPhts cesoneteh Mneven att edu cep tants a ¢ | Reguaty peter apiies —| sae Spas page apa Meiveetdrerscunnta | ungnetgneste Vdnoaretepebecete Teeeepeciremecimeee | sented et tect rsscaare : Siertentv nro A esl eg estan gag [en ree eer ‘Mad Sunn dragged er | peabyetwpeesndesbesee pat SS err seay cee tecceined-ou | Pseranediter tener taia ean iano mettre kin | pe ecg eed teers ls rise sone a eed So Beare rae neeeen cay | recency arcane epitoasimebenent Palade artes Staiseme nent a [soaps pe mca on | ll i yada sos ee eraser era j_[trsseeee irene + ay wings asp of ely cmt -fnoe edt ely ha Bem lect + Canal nity at what secon ee clot lite eee posible 1 Lhtotapeed popu auscneatofvheeren lrg dial fee 1 Updied popu gee oir BuAsiaPacific @, =