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NEC3 ECC: The requirements of Early Warning Clause 16.1

+1 vote
Clause 16.1 clearly differentiates between matters which increase the total of the Prices and matters which increase the Contractor's total cost. (Notification of a potential increase in Prices is mandatory, while notification of a potential increase in cost appears to be optional-(the use of "may" in the last paragraph of CL16.1).

Why do you think the clause does not include a similar differentiation between matters which could delay the Completion Date and matters which could only delay planned Completion? Particularly when the Contractor is also obliged to submit programmes regularly.

There doesn't appear to be any sanction in the Contract if the Contractor does not give an early warning of a potential (or even actual) delay to planned Completion?

In my experience the Contractor needs time to consider potential delays that are at his risk before confirming the implications (usually after a programme reschedule) and the mandatory requirement to notify can become an exercise in bureaucracy.
asked Feb 19, 2016 in NEC3 General by Dave Parkinson (1,660 points)  

1 Answer

+3 votes
I am not sure there is actually a question in there. However, a couple of observations.

16.1 identifies 4 must early warns (increased Price, missed Completion,  missed Key Date and impaired performance) and then says that an early warning MAY be given for any other mater which COULD increase the total cost. Obviously there is an important distinction between the total of the Prices and total cost (the later being expenditure and the former, broadly, being recovery).

You say that missing planned Completion is not mentioned but firstly, the second bullet under 16.1 says Completion not the Completion Date and is therefore focussed on finishing the work, ie planned Completion. Also I would be surprised if a contractor could honestly say that missing planned Completion could not increase his total cost. So, put another way, missing planned Completion probably falls within the optional notification provision anyway.

Missing planned Completion is a compulsory early warning matter. While you could say that the employer is only entitled to the project by the Completion Date so what happens in the interim is not (or at least is less) contractually significant,  that misses the point of the NEC approach.

I can understand your point about contractors wanting time to consider delay that is at their risk. However, I don't agree with it. Better I would say to get the fact of the delay on the table and then work together as a team to solve the problem. Who knows, early engagement might get a very positive reaction from the PM and Employer.
answered Feb 19, 2016 by Rob Horne (8,950 points)  
edited Feb 19, 2016 by Rob Horne