Case 1 :
NEC3 Option A. Price of the contract is $8M. There is an activity in the Activity Schedule that no breakdown has been inserted by the Contractor.
eg. Construction of Building Block A - $ 5M
We trust that will severely affect the Contractor’s cash flow if they only get paid upon completion of the whole Building Block A (1 year later). What can the Contractor do to revise the Activity Schedule and break this activity down such as
Earthwork $0.5M
Construction of 1st Floor $1M,
Construction of 2nd Floor $1M,
Construction of 3rd Floor $1M,
Construction of Building Service works $1.5M
Case 2 :
eg. Maintenance of site accomodation (1st month to 15th month) - $ 1.5M
Can the Contractor request to revise this activity as the following :
Maintenance of site accomodation - 1st month $0.10M
Maintenance of site accomodation - 2nd month $0.10M
…
Maintenance of site accomodation - 15th month $0.10M
There is a better answer already to this question which I’ve linked below, i’d suggest searching some more as this has been asked and answered considering subtle differences.
In short, the Contractor can change the Activity Schedule at anytime but it must be sent to the Project Manager for acceptance (54.2). The PM has 3 reasons for rejecting this (54.3)
This tends to happen at the beginning of a Contract as the Subcontractor doesn’t appreciate during tender the payment ‘terms’ are based on a 100% complete in line with the Programme, so you find yourself from time to time agreeing a revised Activity Schedule with the Contractor after contract award in order to allow them a good and steady cashflow throughout the Project.
I am new to NEC, I cant fully understand the meaning of 54.2 “changes a planned method of working”,
in my case, the contractor did not change anything of the Accepted Programme, but he will wish to break the activity down to solve the cash flow problem.
54.2 set out two conditions for revision of AS, are both conditions to be fulfilled to entitle the revision ?
Contractor changes a planned method of working
the activities on the Activity Schedule do not relate to the operations on the Accepted Programme
Your Contractor is trying to simply resolve a cash-flow issue, In my view it is your choice as the Project Manager whether to do this or not. The Contractor cannot change the AS to improve their cash flow as there is no mechanism of this in the Contract. So again, your choice.
On your point of 54.2 my understanding is if the Contractor scope is to install a cable, and their original method was direct bury but the Contractor decides to say opt for HDD, the Contractor would submit an Activity Schedule reflecting that change.
