Programme for Acceptance

NEC3 and NEC4 Contracts
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Good morning.

Our client has issued us an EWN stating that there is an error within the last accepted programme. Note needs to be made that the programme has already been accepted and formally notified. The error they are referring to is that the planned Completion is later than the Completion date. They are now claiming that as they have issued the EWN, that the programme is no longer accepted. Is there a mechanism within the NEC3 contract, that allows the PM to rescind their acceptance of a programme more than two months after they accepted it? We have explained in response to the early warning that the completion date cannot be after planned completion as they had not implemented any compensation events.

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Technically this isn’t something to be dealt with by early warning as the situation you’ve described isn’t covered under clause 15.1. However the PM still has the right to change their mind if they think they have made a genuine mistake, the question seems to be more about planned Completion and whether this was realistic or not?

You can and should show planned Completion later than the Completion Date if this is realistic. This could be down to many reasons, maybe you’ve had some issues that have delayed you or maybe there are compensation events which have yet to be assessed and implemented.

You should try to have a meeting with the PM to discuss this, maybe they think that by accepting a programme which shows planned Completion after the Completion Date they’ve accepted liability for the delay? That isn’t the case, they’ve merely accepted that your planned Completion is realistic.

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If the project manager changes an earlier decision (refunds acceptance of an accepted programme) it is a compensation event.

However, if his reason for changing an earlier decision is solely because planned completion is later than the contractor completion date, he is wrong to do so and it’s a breach of the contract and therefore a CE.

Showing a delay to planned completion is actually good practice regardless of who is responsible for delay.

It sounds like the PM thinks that because he accepted a programme that shows a delay, he is accepting a late completion.
It sounds like he/she is not all that familiar with NEC contract administration. - that should give you a lot of reasons for concern.

There are mechanisms he can use to address his current concern

  1. EWN the contractor and discuss the reasons for the the delay
  2. He should issue any instructions and CE’s necessary to start the process of assessing the employers delays.
  3. Once he has established who is responsible for delaying planned completion past the completion date, he then has more options
    a. Instruct acceleration to recover the employer delays
    b. EWN the contractor that penalties will be applied and try to assist the contractor recover the contractors delays.
    If the Contractor cannot recover the delay the PM can start a process of scope reduction and assessment of negative CE’s. Giving the PM options to bring in another contractor to finish elements of the work at the contractors expense.

It sounds like the PM doesn’t want to do the work and his hoping to scare the contractor into acceleration, which will only end in a mess and someone else having to sort out the mess he is creating.