We are managing the contract on behalf of the client organisation, operating on an NEC 3 Option C contract.
Part of the works information is a prescribed construction sequence, showing certain work areas only able to progress in series due to operational constraints of the site.
Throughout the contract we have had several instances where the construction sequence has had additional constraints added due to operational requirements, and the contractor has been compensated for these with an increase to the target cost and the completion date.
We have now had an instance where one of the constraints in the working sequence can be relaxed, with 2 areas previously required to work in series now allowed to progress in parallel. This should reduce Planned Completion by approximately 6 weeks.
I would like your view on how should this be dealt with under the contract?
My understanding is the Completion Date cannot be reduced under NEC Option C, so does the reduction in Planned completion generate Total Float (to be used by both parties, first come first served) or Terminal Float (available only to the contractor), and should the Target Cost be reduced?
Thanks for your views on this.
Hi
Yes your understanding of the contract is correct a compensation event cannot make the Completion Date earlier, this requires an acceleration quote to be agreed mutually with the Contractor. Whether the change impacts the planned completion (or where the flapt appears) will depend on whether it’s shown on the critical path or not on the last accepted Programme.
Thanks Chris, the work is indeed on the critical path at the moment. What impact does this have?
Is there any impact to the Target Cost on raising this PMI changing the work sequence?
Hi Scottish PM Its difficult to comment on what impact this specific change will have on the Completion Date, as there are quite a few factor that will influence this, timing of the notices, what shown on the last Accepted Programme and also other tests in NEC. I’d suggest you read clause 63.3 to 63.7 which contain the broad principles of how delay is assessed. Generally if it was on the critical path and its removed it would bring back the planned Completion which is owned by the Contractor. This float would always be retain by him. You might wish to consider getting an acceleration quote to change the Completion Date instead, before removing the constraint or getting a quote for a proposed PMI to remove the constraint.
The PMI and CE can reduce the total of the Prices i.e. Target Cost if the Scope is reduced, although you may not get all the cost savings you were hoping for. Might be doing a Proposed PMI instead so you are sure of the savings. Hope this helps 