NEC4 TSC - Cl.32 Plan not accepted - Notified CE

A Cl.32 Plan was issued to the Service Manager (SM) for acceptance, following which the period for reply elapsed. In parallel with informal reminders, the Service Provider (SP) then issued the SM with an early warning as a reminder that a reply had not been received. The SM then subsequently responded and stated that the plan was not accepted due to it not being realistic. Conversations were then held to ascertain the specific reasons for this, which turned out not to be justifiable with the reason for non-acceptance; long story short, in the time it had taken for the SM to to review the submitted Plan, the works had progressed and future change had occurred beyond the data date of the submission that they wished to be taken into account. The SP would cover those changes in the next submission, or sooner if instructed separately. At that stage, the status of the Plan was that it was not accepted.

The SP then notified the SM through a general communication that following those discussions, the submitted Plan should be re-considered for acceptance as there was no other reason not to accept this. A further period for reply elapsed and the SM maintained that the programme was not accepted for the original reason stated. The SP then notified a CE against 60.1(9) The Service Manager withholds an acceptance (other than acceptance of a quotation for not correcting a Defect) for a reason not stated in the contract. The SM then accepted that this was a CE and has instructed the SP to submit a quotation. Rather bizarre as it would appear that the SM then agreed with the SPs argument and the whole thing needn’t have gone that far. Indeed, in all my years as a planner, I have never had to notify this CE against programme and have resolved things through further explanation or revision.

I therefore have two questions:

  1. What is the status of the submitted Plan, given that the response (within the reminder period) from the SM was ‘not accepted’ but it would appear this was not the correct decision. Is there deemed acceptance for the Plan?

  2. What, if anything, does this CE entitle the SP to under the TSC? I would struggle to demonstrate a delay to the critical path, or a direct cost, which leads me to question the value of the CE and whether this process in the contract is fully thought through.

Firstly, the ‘reminder’ notification should be separate from an early warning notification, as they relate to separate procedures under the contract. It looks, however, that the Service Manager has treated the EWN as a ‘reminder’ notification and responded accordingly.

As you have said, the plan is a ‘snapshot at a particular point in time’ (data date) which should be realistic based on that date, provided the data date reasonably relates to the plan submission date.

As the Service Manager has accepted your CE notification, this does seemingly create a bizarre situation, although again the compensation event procedure is separate from the plan submission, with actions dealt with under each as a separate procedure.

In response to your questions;

  1. The submitted plan is ‘not accepted’ as determined by the communications and responses. If the EWN is treated as a ‘reminder’ notification then the Service Manager has responded and stated their decision. If the EWN is not treated as a ‘reminder’ then you would be out of time to notify one anyway.

  2. Any time assessed for a compensation event would relate to a Task Completion Date, although alterations to remaining work would need to be assessed. As you say it may be difficult to determine any such time. The assessment of cost would likely be the effect on Defined Cost, assessed in accordance with the (Short) Schedule of Cost Components (you don’t say which main option). This would probably relate to the time spent by resources dealing with the issues stated, as a consequence of the Service Manager’s non-acceptance of your submitted plan. Contrast this assessment with an assessment of resource time where the plan is accepted by the Service Manager, to determine the potential ‘effect’ of the compensation event. Any assessment, however, would be based on ‘additional’ Defined Cost, so you would need to apply commercial judgement to ensure compliance with this principle.

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Thank you, Andrew. I will revise my form of communication in future so this does not conflict with the process.