NEC ECC: PM reducing duration's on last accepted programme to reduce Impact of a CE

NEC3 and NEC4 Contracts Compensation Events
1

Our contract is NEC-3 and we have issued to the Project Manager some CE programmes showing the impact that these have had on the planned Completion. We have used the last accepted programme to assess the impact of a CE on the planned completion. As per clause 63.3 the Completion Date would be impacted as much as the planned Completion against the last accepted programme.

Nevertheless, the PM assessment came back and is changing the durations and sequence in our last accepted programme in order to reduce the impact of the CE. These changes made on the last accepted programme are not based on anything other than the “PM thinks these duration’s are wrong”. These activities have not been affected by any change, and have been agreed in the clause 31 and sub-sequence revisions of the clause 32 programme. Their duration’s have been reduced just for the purpose of reducing the duration of the critical path.

I would understand these changes on the clause 32 programme if it can be improved, but not when the impact of a CE is being assessed. Otherwise, reducing our duration’s would have an effect on the completion date, and this is basically an acceleration.

Even though I have explained this to the PM, they still believe they can change the duration’s and logic when assessing a CE.

My questions are:

  • First of all, can the PM change the last accepted programme when assessing a CE even though these activities are not affected by the CE itself?
  • The PM is impacting a modified version of the last Accepted Programme, therefore with a different planned Completion date (let’s say PC2). On his assessment, he only looks at the updated planned Completion date (PC3) as the new completion date. I would say that the completion date should be impacted as much as the variance in the planned completion (this is PC3 - PC2). Nevertheless, the PM is just looking at the date PC2, not at the variance. Am I correct in saying that the Impact should be measured in days and not as a particular date?
2

To answer your first question: the PM has no power to change the durations etc. in your Accepted Programme. He/she can only accept or not accept it and, if the latter, state the reasons. In assessing CE quotations, he/she uses the Accepted Programme as the basis for assessing delays directly under 63.3 and indirectly the change in Defined Costs (DC) by reference to what you were planning do before the CE and hence planned resources and then the change in resources as a result fo the CE (which are then priced up to give the change in DC).

Because the PM is impacting a modified version of the last Accepted Programme - not the actual Accepted Programme - he is incorrectly the compensation event. He should be assessing it in accordance with clause 63.3 (NEC3 ECC) or 63.5 (NEC4 ECC), neither of which contain the word ‘modified’ (or equivalent) before the words “Accepted Programme”.

I have to say, if what you say is correct, I have not come across a PM so brazenly making up to suit his perspective before !