Level 1 - Case Study
What are the maximum NEC3 time-scales for Compensation events if the Contractor notifies the PM?
- Contractor has to notify the PM within 8-weeks becoming aware
- Contractor loses entitlement to make a claim if they fail to give notice
- PM has to instruct Contractor of decision within 1-week of being notified
- Contractor has 3-weeks to submit quotation or revised quote dependant on PM response
- PM has to provide response within 2-weeks
- PM can make their own assessment and inform Contractor within 3-weeks of initial response
Level 1 - Case study
How does this sequence differ if the PM was to notify the Contractor?
- There are no initial time-bars apply
- The PM should notify and instruct the contractor to submit their quotation when they become aware
Level 1 - Case Study
How long did the PM on your project have to respond to the contractor’s quotations and is this always the case?
- Two-weeks
- It depends on the conditions of the contract
Level 1 - Case Study
What would happen if the PM failed to respond to the Contractors Quotation worth £176K on your project?
- The quotation & programme would have been deemed accepted
Level 1 - Case Study
What are the advantages of NEC over JCT?
- Encourages Partnering
- Simple language
- Forces rolling final account, avoids negotiating large amount of CE’s at the end
Level 1 - Case study
What are the key differences between NEC3 & 4?
NEC4 includes changes such as;
1. Terminology
- Employer > Client
- Works Information > Scope
- Gender neutral
- Risk register > Early warning register
- Employers risk > Clients liabilities
- Value engineering provisions to Options A&B
- Programmes accepted a week after prompt notice if no response is given
- Changes to fee percentage
- Changes to valuations provision
- Time based process to settling final accounts
- New contracts
- New secondary options
- Changes to X-clauses
Level 1 - Case Study
Why was Option A used on your project?
- I wasn’t involved in the selection of appropriate standard form, however,
- in my experience as the project was refurbishment works, it was beneficial to group activities and it offered simplified payment process.
Level 1 - Case study
What are the pitfalls of using Option A?
- No provision for part payment
- Can impact cashflow
Level 1 - Case study
How is the risk of no part payment overcome?
- Divide the activities into bitesize portions
Level 1 - Case study
Why did you not utilise Option C?
- No cost certainty is offered
- Target cost can be exceeded
Level 2 - Case study
Why was the shorter schedule of cost components not used in agreeing the CE?
It was pre-agreed to use tender rates or pro-rata rates where applicable.
Level 1 - Case study
You say you would instruct the contractor to provide several sub-contract prices next time one element accounts for such a large portion of the project, why was this not done initially?
- Turn around time between 2nd stage appointment and submission happened really quickly and there wasn’t much time.
- There was a lack of communication
- It is something I will take forward and consider next time
What clauses relate to damages and sectional completion?
- Sectional Completion - X5
- Damages - X7
Case Study
Why was a 2-stage tendering process chosen?
- It was thought that programme could be secured by getting on-site early whilst the design was being finalised
- Design would benefit from contractors input
Case Study
Did you advise on other potential tender options?
- I advised the client to consider a competitive single-stage
- To achieve value, cost and programme certainty from the outset
Case Study
Competitive single-stage doesn’t give the buildabilty advice to the design
- No it doesn’t, but it wasn’t needed as the design was complete prior to the 2nd-stage and;
- We were installing a like-for-like system, utilising existing pipework routes
Case Study
What other tender strategies offer programme benefits and buildability advise?
- Negotiated tender
- Construction management
- Management contracting
Case Study
How do these alternate tender options differ from a 2-stage?
- They’re single stage
Case Study
You mentioned that you considered a traditional procurement route as this would likely obtain competitive tenders, why only likely whats a scenario whereby it wouldn’t obtain a more competitive tender comparatively to a 2-stage?
- Due to fluctuating market conditions, there are no garauntees that significant savings could be achieved
Case Study
What information did you ask the contractor for in their 1st stage tender?
- Preliminaries Charge
- Design Fees
- OHP
You mention re-tendering the mechancal sub-contract to get more then one price back, how did this effect programme seen as this was the key driver?
- It impacted the programme postively
- Hence why it was the chosen option
- It mitigated any delays incurred whilst awaiting additional funds
What in-house data did you use?
- Benchmarked rates
- Previous rates
Case Study
How is it possible for other cost data to be applied to this project?
- I would rebase the data to the current time and location
- Make small allowance as the environment was highly sensitive
How did you check the rates for the building elements within the tender?
- Benchmark rates
- Pricing books such as; Spons
- Previous tenders
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