Source: http://slideplayer.com/slide/2617580/
Timestamp: 2017-01-23 21:07:14
Document Index: 689571217

Matched Legal Cases: ['ART 2', 'ART 2', 'ART 2', 'arts 1', 'art 1', 'arts 2', 'art 5', 'art 2', 'art 2', 'ART 2', 'ART 1']

© Morecraft Drury 2014 NEC 3 - P ART 2 By Trevor Drury. - ppt download
Published byKiara Bolen
Presentation on theme: "© Morecraft Drury 2014 NEC 3 - P ART 2 By Trevor Drury."— Presentation transcript:
© Morecraft Drury 2014 NEC 3 - P ART 2 By Trevor Drury 2
© Morecraft Drury 2014 P ROGRAMME Day 1 NEC 3 – Option A Priced contract with activity schedule o Main core clauses overview : o Contractor and PM responsibilities, time, testing & defects, stage payments, activity schedules, Early Warning Notices, risk review meetings and risk registers, compensation events, quotations, termination o Change Overview : notices, timing – group work exercise o Timescales for Compensation events – group work exercise Compensation events, changes to prices – group work exercise session o Programme – the accepted programme, revision/update, evaluating extensions of time, ownership of float o Questions o Homework question paper handed out for completion by Day 2 3
© Morecraft Drury 2014 P ROGRAMME o Day 2 o Review of question paper from Day 1, answers and discussion of issues raised o The NEC Short Form of Contract and how it differs from the main NEC 3 o Invitations to tender (ITT) o Works information o Contract data parts 1 and 2 o Secondary & Option Clauses W, X, Y and Z clauses o Schedule of cost components o Dispute resolution o Payment and the Construction Act and group worked exercise o NEC – signed underhand or by deed ( limitation period issues) o Changes in the latest NEC 3 April 2013 edition (BIM, Project Bank Accounts etc.) o Questions 4
© Morecraft Drury 2014 W ORKS I NFORMATION o Good Works information reduces misunderstanding and disputes. o Works information is defined at 11.2 (19) o It should be “ a complete and precise statement of the Employer’s requirements. If it is not, there is a risk that the Contractor will interpret it differently from the Employer’s intention” o Works information is provided by the Employer and the Contractor. Both are separated 5
© Morecraft Drury 2014 W ORKS I NFORMATION o Employer’s Works information includes: o Technical information, specifications and drawings o Constraints o Requirements for work to be designed by the Contract o Contractor’s Works information is particulars of the Contractor’s design o Contractor’s primary obligation is to provide the Works in accordance with the Works Information (20.1) and hence why it is important to get it right 6
© Morecraft Drury 2014 W ORKS I NFORMATION o The Contract Data sets out where the Works Information is to be found o Works information should not repeat, contradict or create an ambiguity with the Contract Data or Conditions of Contract o Works Information is different to Site Information – Site Information describes the site before commencement and Works Information describes what is to be done on the site. o Works Information and Site Information is incorporated into the Contract by reference to documents listed in the Contract Data. 7
© Morecraft Drury 2014 W ORKS I NFORMATION o Site Information includes: o Subsoil investigations o Reports obtained by Employer e.g. Hydrographic data o Reference to publicly available documents concerning the site o Charted services o Information about buildings,structures and machinery o Distinction between Works Information & pricing documents o Pricing information explains prices and does not describe the Works o Pricing documents do not change the Contractor’s obligations to provide the Works in accordance with the Works Information 8
© Morecraft Drury 2014 W ORKS I NFORMATION o Unlike some contracts there is no hierarchy of documents save that the Works Information has priority over the Contractors information o Ambiguities are to be dealt with by the PM under 17.1 by the issue of an Instruction o This leads to a Compensation Event under 60.1 (1) unless as a result of the Contractor changing his design to comply with the Works Information o Ambiguities in the Site Information is resolved in favour of the Contractor 9
© Morecraft Drury 2014 W ORKS I NFORMATION o Must be clear, complete and precise. o Standard specifications should be reviewed and amended before incorporation and great care should be taken. Many claims have arisen out of cutting and pasting specifications from previous jobs! o Specifications should be checked for consistency with other contract documents o Avoid subjective requirements such as “in the opinion of” 10
© Morecraft Drury 2014 W ORKS I NFORMATION o Keep it simple – clarity and simplicity are required o Use simple words o Sentences should be as short as possible o Use bullet points for lists o Unlike many contracts NEC 3 uses few adjectives or adverbs and is possibly the most important drafting convention in NEC. o Capitals – used for defined terms 11
© Morecraft Drury 2014 W ORKS I NFORMATION o Chapter 4 of the NEC Works Information Guidance sets out each clause / sub-clause where Works Information is referred to and what should be included o Works Information by the Contractor: o Where design is submitted for acceptance, the Works information will change over time o Warning ! Where the Contractor has offered an alternative proposal to the Employer’s Works Information, if accepted, the Employer’s Works Information must be changed 12
© Morecraft Drury 2014 C ONTRACT D ATA o Data provided by the Employer – Part 1 o General – select one main option (Option A) and a dispute resolution option( W2 if HGCRA applies). In addition select the secondary option clauses appropriate o State who the Employer is and its usual address. Does not have to be the registered address o The name and address of the PM. It is important that the chosen PM has the time to carry out his duties effectively and the Employer’s authority to act. o The Supervisor’s name and address – important role in checking works are in accordance with drawings and specifications and issues the Defects Certificate 13
© Morecraft Drury 2014 C ONTRACT D ATA o The Adjudicators name and address e.g. Trevor Drury.... or name the Nominating Body. o State in which documents the Works Information is contained. The guidance note refers to parts 2,3 and 4 of the enquiry document and similarly part 5 for Site Information o Site boundaries need to be stated which is usually in the form of a drawing which is referred to here in the Contract Data o Time – starting date of contract and access dates need to be entered o Enter the defects date and the period(s) for defects correction o Payment –enter payment interval and interest rate for late payment o Weather – where is it to be recorded 14
© Morecraft Drury 2014 C ONTRACT D ATA o Weather – days of snow lying before a compensation event due, who is to supply the weather data and where is it to be recorded. Where no weather records available, assumed values are entered. o Insurances – limits of indemnity 15
© Morecraft Drury 2014 C ONTRACT D ATA o Optional statements cover: o Tribunal – arbitration? Procedure? Name of arbitrator or nominating body o Completion date, is Employer unwilling to Take Over early?, if no programme requirement in part 2, when is the Contractor to submit its first programme o Key Dates o Payment period if not 14 days o Any additional compensation events o Any additional Employer’s risks - for risks that may be unfair to pass down to Contractor o Insurance for any Employer plant o Insurances to be provided by Employer and level of indemnity 16
© Morecraft Drury 2014 C ONTRACT D ATA o Options X1 to X20 o Z clauses o Part 2 to be provided by the Contractor o Name and address o Direct fee % o Subcontracted fee % o Working areas o Key personnel o Items to be included in the Risk Register 17
© Morecraft Drury 2014 C ONTRACT D ATA o Optional Statements o Where Works Information is contained relating to the Contractor’s design o Programme details o Completion date for the whole works o Activity Schedule location o Tendered total of Prices o % for people overheads ( prelims) o Equipment lists and % addition/reduction o Rates for other equipment o Hourly rates for Defined cost of design o % for design overheads o Expenses for design employees included in Defined Cost 18
© Morecraft Drury 2014 A SSESSING C OMPENSATION E VENTS o Clause 63.1 The Changes to the Prices are assessed as the effect on: o The Actual Defined Cost already done o The Forecast Defined Cost for work not yet done o The resulting fee o Defined Cost is stated at 11.2 (22) – “Defined Cost is the cost of components in the Shorter Schedule of Cost Components whether work is subcontracted or not excluding the cost of preparing quotations for compensation events 19
© Morecraft Drury 2014 A SSESSING C OMPENSATION E VENTS o The Schedule of Cost Components – see P41 & 42 o Lists 7 criteria: o People o Equipment o Plant & Materials o Charges o Manufacture & Fabrication o Design o Insurance 20
© Morecraft Drury 2014 A SSESSING C OMPENSATION E VENTS o E.g. People costs i.e. those costs paid by the Contractor plus those costs of employment required by law and pension, for those directly employed and normally working within the Working Area o Determine what costs fit by reference to the Data for Shorter Schedule of Cost Components contained within Contract Data Pt. 2. – see P 52 o The percentages stated are applied to give the component cost or the Defined Cost of People o The fee is as stated in 11.2.(8) 21
© Morecraft Drury 2014 S ECONDARY O PTIONS o X1 to X20 o X1 price adjustment for inflation– to be used in periods of high inflation and long term projects o X4 Parent Company Guarantee – in the form provided in the Works Information o X5 Sectional Completion – clarity required stating what is included in each section o X7 Delay Damages – the rate is stated in the Contract Data at a daily rate. Must be a genuine estimate of the Employer’s loss and not a penalty 22
© Morecraft Drury 2014 S ECONDARY O PTIONS o X12 Partnering - Core Group, Partnering Information, KPI’s & incentives o X13 Performance Bond – in the form and in the amount stated in the Works Information. Must be within 4 weeks of contract date. “On demand” or surety bond o X15 Limitation of the Contractor’s Liability for his design to reasonable skill and care o X16 Retention o X18 Limitation of Liability – a cap on indirect or consequential loss. Also covers liability for defects, delay damages and so on. 23
© Morecraft Drury 2014 S ECONDARY O PTIONS o Y (UK) 2 – HGCRA 1996 as amended by the LDEDC Act 2009 o Z Clauses o There are a set of standard clauses for use by Government agencies 24
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT o Since 1999 the construction industry has been subject to the Housing, Grants, Construction and Regeneration Act 1996 which has been amended by the Local Democracy, Economic Development and Construction Act 2009 o The amendments took effect on 1 October 2011 25
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT o The effect of changes to the NEC3 o 108(3A) – contract must include in writing a provision for the correction of slips o 108A – Any provision seeking to restrict the Adjudicator’s power to allocate his fees is to be ineffective o 110A – substantial amendments to payment provisions. Where payment follows the issue of a payment certificate, the certificate and details of how the payment has been calculated must be issued together as the “payment notice” 26
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT o The notice must be issued within 5 days of the payment due date o 111 – replaces the requirement to issue a notice to withhold payment with the requirement to pay the notified sum or give notice to pay less o 111 (9) – a new provision requiring that payment must be made within 7 days of an Adjudicator’s decision which increases the amount due under a payment notice o Option W2 is amended to change 14 days to 5 days o 112 – contractors right to recover costs of suspension 27
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT o Amendments to the NEC3 o Page 55 Option Y (UK) 2 : Y2.2 – 3 rd paragraph replaced with: “ The Project Manager’s certificate is the notice of payment to the Contractor specifying the amount due at the payment due date (notified sum) and stating the basis on which the amount was calculated” 28
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT o Y2.3 replaced with the following: “ If either Party intends to pay less than the notified sum, he notifies the other Party not later than seven days (the prescribed period) before the final date for payment by stating the amount considered to be due and the basis on which that sum is calculated. A Party does not withhold payment of an amount due under this contract unless he has notified his intention to pay less than the notified sum as required by this contract” 29
© Morecraft Drury 2014 J UNE 2013 MondayTuesdayWednesdayThursdayFridaySaturdaySunday Week Week Week Week Week Payment due 7 days after assessment date Certificate to be issued and details of how amount calculated no later than 5 days after due date Last date for issue of Certificate Due Date Assessment Date Notice to Pay Less 7 days back from final date Latest Date for Payment 14 days from Due Date etc 30
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT If the assessment date is the 14th June 2013: o When does the Certificate and supporting calculations have to be issued ?( no of days and date) o What is the Due Date for Payment? o What is the Final Date for Payment? o What is the latest date for issue of a Notice to Pay Less? 31
© Morecraft Drury 2014 P AYMENT – C OMPLIANCE WITH C ONSTRUCTION A CT If the assessment date is the 14th June 2013: o When does the Certificate and supporting calculations have to be issued ? – 5 Days after the Due Date – 26 June o What is the Due Date for Payment? – 21 June o What is the Final Date for Payment? – 5 July o What is the latest date for issue of a Notice to Pay Less? – 28 June 32
© Morecraft Drury 2014 S HORT C ONTRACT o For projects not requiring sophisticated management o For straight forward work – value not the issue o Of low risk to both parties o Employer uses package to invite tenders o Title page, contract data, Contractor’s offer, Employer’s acceptance and Price List 33
© Morecraft Drury 2014 S HORT C ONTRACT o Information provided by Contractor only listed in Works Information only if Employer satisfied that it is required o Works Information important as defects based on what is stated in the Works Information o Employer may include a list of subcontractors to select from o Employer sets out constraints such as requirement to work with other activities/contracts and any Employer’s work that will impact on the Contractor o State whether a programme is required and in what form o Provide list of Adjudicators for Contractor to select 1 34
© Morecraft Drury 2014 S HORT C ONTRACT o Other differences with main NEC form: o Contract data is at the front of the document and with Works Information, Contractors Prices etc. makes the Contractor’s offer and is signed by the Employer, if accepted, to form the contract o No access dates o No PM or Supervisor o No compensation event information for weather o Nothing mentioned regarding Take – Over o There is a Price List page which builds up the Contractor’s price and is flexible in that it can form a schedule of rates with quantities or lump sums 35
© Morecraft Drury 2014 S HORT C ONTRACT o Works Information 1. Description 2. Drawings 3. Specifications 4. Constraints 5. Requirements for Programme 6. Services & other things provided by Employer 7. Site Information 36
© Morecraft Drury 2014 S HORT P ROGRAMME o Employer administers contract but can delegate to others o Risk – No risk register mentioned in contract or formal risk meetings however; Contractor and Employer to cooperate to avoid or reduce effects of risk o Employer has to accept design of Contractor before Contractor allowed to start o No provision for inflation o No provision for advance payments 37
© Morecraft Drury 2014 S HORT C ONTRACT Payment o Contractor submits application by assessment date o Employer corrects any errors o Issues a notification o Retention taken o 25% retained for failure to provide first programme o Employer pays within 3 weeks after next assessment day (51.1) 38
© Morecraft Drury 2014 S HORT C ONTRACT Compensation events o Contractor takes risk of weather up to a cap (one seventh) o Quotations within 2 weeks o Employer replies within 2 weeks 39
© Morecraft Drury 2014 D ISPUTE R ESOLUTION o Referred to an adjudicator o Must notify of a dispute within 4 weeks of being aware of it o If a further 2-4 weeks have passed, a party can refer to adjudication o Failure to comply with the above – parties are time barred o Adjudicator’s decision within 4 weeks 40
© Morecraft Drury 2014 D ISPUTE R ESOLUTION o Parties carry on as if matter had not been referred to adjudication o Decision binding until finally determined by the tribunal o Arbitration only after adjudication o Has to notify other party within 4 weeks of Adjudicator’s decision 41
© Morecraft Drury 2014 C HANGES IN THE NEC V ERSION The main changes are: o Updated with amendments e.g. Changes to Construction Act o Introduction of Project Bank Accounts o Requirement for Contractor to submit applications for payment o Some changes to 61.1, 61.3, 61.4 o Updated to incorporate BIM 42
© Morecraft Drury 2014 E XECUTING THE C ONTRACT o No where to sign in the main form! o Letter bringing contract together – “under hand” 6 years limitation of liability o If 12 year limitation period is required, a deed will be necessary. This will need to be a separately drafted agreement which should also list all of the documents that form the agreement between the parties 43
© Morecraft Drury 2014 If you have any questions please contact Morecraft Drury Central Court 25 Southampton Buildings London WC2A 1AL T HANK Y OU Download ppt "© Morecraft Drury 2014 NEC 3 - P ART 2 By Trevor Drury."
Similar presentations © Morecraft Drury 2014 NEC 3 P ART 1 By Trevor Drury.
NEC - Engineering and Construction Contract (ECC).
CIVL202 Construction Engineering I Tutorial 2 T1Mon11:00 – 11:50 T2Wed09:00 – 09:50.
REVAMPING AND REPLACEMENT OF OBSOLETE ELECTRICAL OVERHEAD TRAVELLING (EOT) CRANES AND SUPPLY OF NEW EOT CRANES TENDERING PROCEDURE IT- 3927/EN 123 Avril.
CONTRACT PAYMENTS & VARIATIONS Training programme on Construction Management & Supervision Eng. Rangith Kulanatha Project Director( WWDP - R/M &J/E) 28.