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How can the Project Manager instruct new Key Dates

+1 vote
We have an Option A contract. There are certain end completion Key Dates included which are subject to imposition of Liquidated Damages if an overrun occurs.  Due to ongoing circumstances, these Key Dates will be extended.  No problem so far.
We would like however, to have included into thte accepted revised programme additional Key Dates which would of course, constitute a change to the WI. The reason for this are the successive interfaces with other parties which up to now are only milestones on the accepted Programme.  We see a risk to the Employer when these milestones are not met. Should such milestones now be considered as Key Dates then the provisions of clause 25.3 would come into play and the Emplyoer would have some recourse.  LD's of course, would not apply.
Is life so simple?
asked Dec 11, 2014 in NEC3 Main options by Antonia Nichol  

2 Answers

+3 votes
I am not sure if you have confused the contractual milestones available within the contract, but even if you have not, many do so I thought it was worth listing them here:

Completion Date: Date by which the Contractor needs to finish to avoid paying delay damages identified in X7 of contract data part 1

Sectional Completion: Only valid if X5 has been included and requires Contractor to hand over a section of the works by the date identified in contract data part 1 to avoid paying delay damages identified in X7

Key Date: Only valid again if identified in the relevant section of contract data part 1 and is the requirement for the Contractor to achieve a certain condition by a certain date. If these are missed by the Contractor (unless for a reason which is not their fault or risk under the contract) then any cost incurred by the Employer is recoverable from the Contractor. The intent of these milestones is to allow the Employer to manage any other 3rd party interfaces that they may have.

Completion Date is not a Key Date, although I have seen it (wrongly) listed as such in more than one Employers contract data part 1. These three milestones are meant to be three separate processes for different elements and situations within the contract. You can not introduce a new Key Date or Sectional Completion during the life of the project as it would be unfair to add a constraint that they would not have had the chance to price for in terms of cost and/or risk.

As Jon states one option would be to introduce this new constraint as a compensation event, but then difficult (impossible?) to impose penalties to miss this new date? What would be easier to add at this stage would be a positive incentivisation for achieving something by a certain date – achieve X by date Y and we will give you a financial bonus of Z
answered Dec 15, 2014 by Glenn Hide (24,930 points)  
apparently, in our case  the client has added new key date/s in the currency of the contract but as part of new supplemental agreement but with LD's attached and also incentive to achieve it x by y and get Z as bonus......
is this acceptable norm or its one off.
+1 vote
Key Dates are stated in the Contract Data, part 1. As such, while Key Dates can be brought forward or put backwards, new ones cannot be added in under the contract.

Instead, you have to revert back to the NEC2 approach (which still applies to 'quite important' to minor dates) of introducing a new constraint into the Works Information which is a compensation event under clause 60.1 (1).

Should  the Contractor fail to meet the constraint, there is no way, within the contract, to get money back from the Contractor, although you could arguably claim under contract law for a breach. Having said that, if it is a constraint introduced post contract signing, then it makes it even more arguable !
answered Dec 12, 2014 by Jon Broome (16,120 points)