It’s no secret that to achieve as a team we need to trust and cooperate with each other. In construction projects, trusting and collaborative environments are always the most productive, profitable and enjoyable ventures.
We may feel that contracts and contract administration often obstruct this way of working. The issuing and receiving of contract communications can feel cold, adversarial, antagonistic and overzealous. There is often a natural tendency for project professionals to distance themselves with the contract and sometimes refer to it with disdain trying to indicate that the team can somehow ‘rise above’ its requirements and manage the works in an environment of basic trust and harmony.
How often is this approach successful?
We need rules and parameters to work within, we need guidelines and processes to govern behaviour. We must understand and acknowledge each other’s responsibilities, not shy away from them.
Experience shows successful projects are those where people achieve the trust and cooperation elements that are essential for success however, they also consistently manage to communicate in accordance with the contract and with a high degree of quality.
The NEC3 contract has two clauses that are quite specific in relation to communications however I’ve often witnessed projects that either don’t adhere to them or don’t even realise they exist –
Clause 13.1 requires each communication to be in a form which can be read, copied and recorded.
Clause 13.7 requires notifications to be communicated separately from other communications.
What does this mean in reality and what are the potential pitfalls of not acknowledging and adhering to these clauses?
Clause 13.1 is straight forward enough and confirms that we can’t rely on verbal communication. However, this should not be taken to mean we mustn’t talk! Far too many revised quotations and programmes are submitted with futility for the reason that the teams aren’t meeting and talking prior to formal communication.
The remainder of this blog is focused on clause 13.7 for the reason that it’s often ignored completely!
Imagine a simple change to the works information under NEC3 ECC where the Project Manager (PM) gives an instruction under clause 14.3. In nearly all circumstances this is a compensation event and will also require an instruction from the PM for quotations to be submitted. So from a simple change there are three types of communication and these should be communicated separately but at the same time -
- Instruction under clause 14.3 changing the Works Information.
- Notification under clause 61.1 of the compensation event.
- Instruction under clause 61.1 for quotations to be provided.
It’s rare to see this bureaucratic diligence in action on projects, usually because of the time it takes to write three letters or fill in three template forms. This may not be an issue if an agreed system is in place so all parties are aware of what has been communicated and what hasn’t. The problem arises when notifications, instructions and other communications are combined within corporate proformas or generic communication templates.
For example – notifications contained within minutes of meetings, technical notes, progress reports or other documents. Often these are vague and merely make reference to some cost and time impact being expected – to be communicated at a later date. This doesn’t meet the standard for notification under clause 13.7 and will only cause consternation at a later date when one party says “but I did notify you about that - in that set of minutes/reports/programme update”.
The other common mistake is to give an early warning and at a later date suggest that this constituted notification of a compensation event. Early warnings are notifications and matters in their own right and therefore compensation events and early warnings should never be notified within the same communication.
So what’s the answer?
- Acknowledge that using the NEC3 requires diligence in communicating and agree on a common system between parties.
- Notifications must be communicated separately – they are very important and often the start of a process within the NEC3 contract which requires managing, so make sure everyone knows a notification has been given by doing it clearly and separately.
- Manage shared registers of communications and events - on a well administered NEC3 contract hundreds of communications will be generated during a project. Employ a method of managing those communications so no one can be in any doubt as to what has been communicated when, to who and relating to what!
Using a contract management system like CEMAR can make this process simple, compliant and consistent by
- automatically producing contract compliant, uniquely numbered communications, date and time stamped and logged in an archive folder.
- dynamically updating contract compliant letters based on user selections to ensure the correct communications are issued and recorded.
- allowing multiple users from all parties to log in and work in the same contract environment, using shared registers to ensure a single version of the truth, without compromising the consistency of communication.
See our video tutorials on how CEMAR manages communications - http://www.cemar.co.uk/tutorials/