One of the central themes of NEC3 contracts, and a significant reason for their adoption across major infrastructure projects across the world, is the engaging and timely project management processes embedded throughout their procedures.  However, it’s only words on a page if we don’t bring to life those processes and live up to the spirit in which they are written.  

That may seem obvious, however it’s common for employers and contractors alike to select this form of contract assuming it’s a panacea to all their commercial woes before swiftly dispatching it to the bottom drawer alongside their old copies of the JCT and ICE 6th.  

So what is it that the contract is expecting and how can we consistently meet those expectations whilst delivering the results we’re all striving for?

  1. Do what the contract says you will do!
    Again, blindingly obvious but clause 10.1 says everyone "shall act as stated in this contract and in a spirit of mutual trust and cooperation" – it doesn’t say “choose one of these things and don’t do the other” and it certainly doesn’t say “if you don’t follow the contract, don’t worry because the other party has to play nicely”!  If you could only have one of these elements I’m sure most of us would choose the former – this provides a framework to work within and we can all hopefully nurture the latter regardless.
     
  2. Work within the timescales set out in the contract (see no. 1 above!)
    I’ve acted as a contractor and project manager so I can well see how sticking to this task may prove extremely difficult on a dynamic, complex project however the NEC3 contract provides us with tools to help ease the stress of these durations.  It allows us to agree on increased durations for decision making – this may be more time for a quotation to be prepared, response to a quotation (clause 62.5) or any other period of reply (clause 13.5).  With compensation events it allows the Project Manager to make assumptions which assist the contractor in estimating the impact of an event, often quotations are delayed because the contractor knows he only has “one bite of the apple”.  Common sense assumptions from the Project Manager allow the Contractor to quote safe in the knowledge that should these assumptions be proven to be incorrect this is cause for further compensation.
     
  3. Empower individuals to make decisions
    No 1 & 2 above are impossible without allowing experienced professionals the space to make these decisions.  Employers and Contractors alike should be brave in delegating authority to their representatives within contracts and streamlining internal governance to allow the flow of decision making crucial to managing an NEC3 contract.  So often I’ve seen the positive behaviour of project teams eroded by the inertia of internal governance – there is nothing more demoralising for a project manager than shaping a solution and watching the opportunity for action slip away….

So there are some basic ways in which you can move from a reader of the NEC3 to a user of the NEC3 and another step you could take is utilising a contract management software tool like CEMAR.  It’s designed by NEC3 practitioners and therefore the 3 issues I’ve highlighted are central to all its workflow and functionality – 

  1. Do what the contract says you will do!
    Through every piece of workflow CEMAR guides the user, only showing the available contractual options and dynamically updating to maintain compliance.  It also automatically generates and archives contractually compliant letters for all communications allowing a complete database to be created in order to protect all parties and for those us who still like paper we can print off copies and take them to meetings just like the “good old days”!
     
  2. Work within the timescales set out in the contract
    CEMAR automatically generates a reminders desktop providing a snapshot of all the “live” actions requiring attention.  As a collaborative tool it allows parties to look at what actions are currently outstanding with the other and a live print out of this could be the agenda for a regular commercial meeting.  In keeping with contractual compliance CEMAR also allows requests and agreement on extensions to certain contract timescales.
     
  3. Empower individuals to make decisions
    Arguably the most powerful and unique element to CEMAR is its ability to be moulded to your own internal governance system.  Alerts and approvals can be set up for all users based on dozens of actions under the contract allowing appropriate levels of autonomy but also where business requirements dictate providing a streamlined internal governance system.  This is further supported by a comprehensive reporting tool allowing senior managers a view across multiple contracts along with powerful user defined reports to benchmark and analyse trends.

Comment