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NEC ECC: Delays to Employer design release

+1 vote
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I have an interesting situation regarding design release information and float and DD's on an ECC option A contract.

The contract data sets out when the Employer will give certain design information for a number of systems, it also gives an associated sectional Completion/DD date for each system.

Various systems design release dates have been delayed by the Employer and notified accordingly with an associated CE.

For example a system design release date was 29/08/16 with DD/Completion Date of 21/06/18 - a completion period of 94 weeks.

Our original programme identifies the design release date and shows work commencing some time after design release and completing before the DD date, but does not show any float.

If the system identified above design release is delayed to 16/10/17 are we entitled to move the completion/DD date by the corresponding 94 weeks to 08/08/19?

This is the case for 12 separate systems.

I am arguing that the contract clearly identifies a period for completion for each system and this time is at our disposal to schedule the works as we see fit to complete
within the contract period, and that if the design release date is moved so should be the DD/completion date by an equivalent period in order for us to maintain the same risk profile and design period as the contract contemplates, akin to terminal float (despite it not being specifically identified in our original programme).

The employer is arguing any period post completion in our programme and prior to DD/contract completion date is free float for the contract to use to absorb any delays and is using our original completion periods to re-programme.

This however greatly reduces our ability to schedule the works and has resourcing implications for us and increases our exposure to DD's.

I hope I have provided enough information and would be interested to hear your experiences and suggested approach to this.
asked Jul 20 in NEC3 Time by Simon   2 5
   

1 Answer

+1 vote
This is an interesting one !

Clause 63.3 is the clause which governs the calculation of the delay to the contractual Completion Date with reference to how far back practical Completion is delayed. The same principles apply for section Completions and Completion Dates.

So if you had programmed in to start work on the dates when the Employer was due to give you this information, you could argue that Completion would be delayed by the same time and hence the contractual Completion Date would be put back by the same time.

However, the Employer is correctly arguing that you have free float in your programme - between when they issue the information and when you plan to start doing the work - which they can use up for these compensation events. You don't give when you were planning to start this work, but if it was after the date the Employer actually supplied the information, then there is no delay to you and hence putting back of the Completion Date.

If, on the other hand, they gave it to you after you were planning to start the work, then planned Completion would be delayed by the difference and hence this would be the time that the Completion Date was put back.

I hope I have read your question correctly. If not, add a comment.
answered Jul 20 by Jon Broome (25,100 points)  
Agree with Jon's answer.

Just to add, you say that the change to the design release dates 'greatly reduces' your ability to schedule the works with associated 'resourcing implications'. I am not aware of the actual reasons why this is the case, although if you can demonstrate that the risk profile has altered as a direct result of the late release of information, this could be included within the quotation assessment as a disruption issue.

You would need to demonstrate some considered principles and apply an intelligent calculation and substantiation, although I don't see why you could not include this not least as a risk allowance.
Thanks for getting back to me.

By way of further information/query/clarification:

I've reviewed the programme further and as soon as the design information is released we conduct a review, which is an activity in the activity schedule with associated payment.

We then have a period of inactivity of several months, followed by design/build which completes prior to the contractual LD date.

Could we therefore argue that the period between the design review and commencement of the design activity is in fact our time risk allowance in the activity and therefore cannot be used by the employer?

For example, the first system was released to us on 29/08/16, immediately followed by our design review, we then commence design work on 29/10/16 that first 3 months would be considered our time risk allowance.

From 29/10/16 to 29/06/17 is our design/build period as identified in the contract programme.

Does the period then from 29/06/17 to 21/06/18 remain as terminal float even though it was not specifically identified in the contract programme?

Our issue is we have 12 systems to complete and cannot do all 12 at once, the way the design dates were spread in the programme was over 9 months or so, the way they have been moved by the employer is such that they are now stacked over 2 months. So if we lose the float at the beginning of each system we lose the ability to properly schedule our works across the totality of the period identified in the contract.

Thanks in advance!
Firstly, 'doing nothing' is not time risk allowance - that's float within the bar for average productivity risks. 'Doing nothing' in-between bars is free float and whoever gets to it first can use it, so from your original post it would appear to be the Employer.

However, my response was on the basis of programming only and did not take into account resource constraints i.e. we physically don't have enough resource to do this over two months, hence why we staggered it over 9 month. If you can demonstrate this, then you might well be able to show that you are entitled to a much larger - possibly all - delay to the Completion Date. The key clause to demonstrate is still 63.3.

H
Thanks for all your responses.
linking it all back to resourcing is the overriding factor here for us I think.

The one niggling thing in the back of my head is our exposure to liquidated damages though. At time of contract we had a certain exposure to LD's and 94 weeks in the example above to complete the works. If the free float is used we now only have 70 weeks to complete the works and our risk of LDs has increased by 24 weeks.