NEC3 ECC: How to deal with a Client defined Activity Schedule for Option A

NEC3 and NEC4 Contracts Compensation Events
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I am an estimator preparing prices for a Tender using NEC3 Option A – Priced contract with activity schedule.

In the pricing instructions our client has stated “This Pricing Document [a list of activities created by the client] as completed by the tenderer will be incorporated into the contract as the basis of the contract Activity Schedule.”

The activities specified by the client include large amounts of work that can be only demonstrated as complete toward the end of the contract duration; this will have a negative effect on our cash-flow.

Whilst I understand the Pricing Document listing the client defined activities will facilitate comparison of the various tenders they receive, this is not suitable as the activity schedule which the Contractor is at liberty to define.

It is intended to create an activity schedule (to be named in contract data part two) with smaller well defined activities which can be demonstrated as complete to facilitate cash flow and enable prompt payment to sub-contractors.

The concern is that the Employer will insist his Pricing Document be used for payment.

Please advise your opinion.

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Your approach is exactly what I would recommend. I would hope that the only reason the Employer has asked you to fill in their “activity schedule” is so that they have an “apples and apples” comparison of the tender prices that come in. They should not be looking to restrict the Contractor’s cash flow on the project as the contract assumes that the Contractor should produce the activity schedule.

By completing their activity schedule for tender review, but providing your own more detailed one and referencing that in contract data part 2 as your cash flow mechanism on the project should not be detrimental to either Party.

What I would recommend is telling the Employer that is what you intend to do now before you submit your tender - so you hopefully get positive feedback that they will not have any issue with that. In the unlikely event that they refused, that will only mean you are more likely to front load the activities that will be finished early.