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Assessment of delay on NEC 2 form of contract.

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Stuart Atkinson
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Planners,

Using NEC 2 Option C, can anyone (who has used this form on live contracts) tell me how you assessed compensation events once instructed. For arguments sake the actual period for the CE is 10 days.

Also, can anyone direct me to ant precedent relating to assessing CEs is this form?

Any assistanace would be greatly appreciated.

Thanks,

Stuart

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Rafael Davila
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100%
Andrew Flowerdew
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Rafael,

The ACCE document sadly missed an opportunity to clarify and or standardise the terminology used in delay analysis, but it does contain a lot of useful information.
Rafael Davila
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Definitively with such a language I do not like AACE, these people are out of touch.

Best regards,
Rafael
Andrew Flowerdew
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Rafael,

I think the UK style TIA under an ACCE definition would be a:

Modeled / Dynamic / Additive / Modified or Recreated / Half step / Multiple Base method.

And no, I’ve never uttered those words on site either!!!!!!!!!!! Just got on with it.
Rafael Davila
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Andrew

Thanks for the clarification, they do differ indeed. The confusion in the US alone is such that I am now in the look for a US forum where Schedule related Claims are discussed under our definitions in order not to complicate it any further.

If I ever present any aace procedures other than AACE 52R-06 (simplified to its bare bones) into a schedule update meeting at the jobsite I would end up with my head into the jobsite port let. Sorry for over 30 years I have been a Project Enginerr / Project Manager, people on the field really understand their job, but don’t give them this jargon. I apply the procedure without mentioning the concept of fragnets; I use as the Baseline the schedule updated just prior to the impact and compare it to the same schedule but with the impact events included.

http://www.aacei.org/technical/rps/29R-03.pdf Give me a Break!

http://www.aacei.org/technical/rps/52r-06.pdf Still too much jargon/(BS).

As you can see we have some TIA definitions that handle concurrency although I do not agree with the legal jurisprudence, I got to live with it.

So far in my jobs I have been successful at using the snapshot approach although the most common method used in practice is to negotiate the EOT using some common sense. People knowledgeable of the details of what going on at the site can figure it out even without recurring to sophisticated CPM procedures, the same way it was done before CPM became of widespread use. Well, it is what at many times our judges do.

More often than not I find myself adjusting the schedule to common sense due to the dynamics of the schedule, never equal to as planned, not even logic, out of sequence is somewhat common. The Contractor has the right to plan his job in a reasonable way, in practice absolute logic does not exist, schedules are a dynamic thing whether the forensic analyst likes it or not. The Owner has the right to know, the Contractor keeps the right to plan.

Cordially,
Rafael Davila
Andrew Flowerdew
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Rafael,

I know from your explanation exactly what process you are on about but your post is a good example of why the confusion over delay analysis methods exists.

In the USA, windows, snapshot and others are classified as TIA under the ACCE RP document.

In the UK, windows is called windows, snapshot is called snapshot and TIA is something different to both of them. We do not normally classify windows or snapshot as a type of TIA, basically TIA is TIA.

Neither approach is incorrect but just leads to confusion. Possibly this explains some comments in American papers on the SCL Protocol - the Protocol refers to TIA UK style which is not covered by the ACCE RP, the nearest the ACCE RP comes is what in the UK is called windows. TIA UK style is an enhanced windows type method, (but doesn’t use distinct windows!), and differs in some important ways - such as it can deal with concurrency, (to current UK law principles), without the need for further analysis.

Basically peoples understanding of what the TIA process will differ depending on where they got their information from so it’s worth being aware of the different possible interpretations of methods when using the terms.

For those who are familiar with the ACCE RP: UK TIA is part MIP 3.4, (progress update part), & MIP 3.7 combined and applied in manner that is not described in any MIP!!!!! OK, not that helpful but one day someone may write a new MIP 3.10 to cover it.
Rafael Davila
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Andrew,

At home I use the slimmed down version of TIA, "a snapshot view",not the ”windows“. I like it because it is forward looking and in addition it essentially takes out of the equation the issues of “concurrency”. By not having a full copy of the NEC I got to be missing something.

http://www.cpmiteam.com/AssessingDelays.html

The following is a sample of a typical CPM Specification we are required under our contracts.

http://rapidshare.com/files/255088743/CPM_Specs.pdf

Best regards,
Rafael
Andrew Flowerdew
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Rafael,

Far from being along way from usual CPM practice, the contract tries to encourage a very high standard of programming - programming that is up todate, realistic and that can be used to assess delays during the project.

It uses prospectively a slimmed down version of what the UK would generally know as TIA, (Not "windows" that the USA often calls TIA - AACE RP MIP3.8 June 23 2009 Ed).
Rafael Davila
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You are right, the only way to interpret the document is by looking at the whole and I don’t have a copy to see how the various definitions/clauses interact.

If so different from our norm or our CPM practice I don’t believe it will have much of acceptance here, not even as a reference. Anyway, it still would surprise me is if too far from our usual CPM practice at this side of the Atlantic.

Can anyone phone them for a clarification, I am too far to do so, my wife would cry if see a phone call to the UK in our phone bill?

Best regards
Rafael
Andrew Flowerdew
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Rafael,

Maybe you should get yourself a copy of the NEC 2 contract
Rafael Davila
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Is NEC 2 a new definition of CPM terms and procedures? I don’t think so.

Seems to me that there is some confusion about what a Contractual Baseline Schedule is and what is an Update Schedule, they are not the same. I believe the following is the general CPM rule.

The Contractual Baseline Schedule represents the target schedule in compliance to contractual milestones and finish dates. The baseline schedule is a fixed project schedule. It is the standard by which project performance is measured. The original schedule is copied into the baseline schedule which remains frozen until it is reset. Resetting the baseline is done when the scope of the project has been changed significantly, for example after a negotiated change. At that point, the original or current baseline becomes invalid and should not be compared with the current schedule.

The Updates Schedules represent the actual status and projection of your job. Under Contemporaneous Methods of Delay Analysis (Forward Looking) it is the basis for the analysis, it becomes your Baseline for this purposes only. It is what I will call in order to avoid confusion a “Non-contractual Baseline” because it does not represent a change in contractual dates per-se. The revised schedule will include all sorts of delays that can be divided in two major groups.

a)Excusable Delays such as Owner Delays, Act’s of God, Weather Delays; these will justify an extension of time but not necessarily a change in contract amount.

b)Non Excusable Delays such as Contractor’s Delays; these will not justify time extension nor a change in contract amount. Will justify the application of Contractual Penalties by the Owner, if defined under the Contract.

If your job is behind (or ahead), the finish date on your updates will show how much, if you are late (or ahead) and you delay the project in addition to, you as the contractor then you are responsible for this additional delay. On the other hand if the Owner causes extra delay you are entitled to extension of time.

At times your schedule will show you are behind while at times your next revision will show you are ahead. The Owner is interested in knowing the actual status of the schedule, your latest update, as well as on the Contractual Obligations as of to-date, the Contractual Baseline.

When the owner realizes by comparing the Update against the Contractual Baseline that you are lagging by too much he might ask you to recover your schedule and keep under the contractual dates or he might accept the delay and latter on when the job finishes he might enforce Contractual Penalties (Liquidated Damages). At times because you as the Contractor are entitled to Extended Overhead Costs reimbursement from the Owner caused delays there is either a write-off or a balance sometimes in favor of the Contractor and other times in favor of the Owner. Therefore it is usual to resolve delay issues on the run and leave open the computation of the balance between Extended Overhead versus Contractual Penalties (Liquidated Damages) to the very end of the job.

Best regards,
Rafael
Andrew Flowerdew
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Seemed to have caused a bit of confusion, (probably not for the first time)!!!!!

See other thread also:

http://www.planningplanet.com/forum/forum_post.asp?fid=1&Cat=1&Top=61729
Andrew Flowerdew
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Oliver,

Strictly speaking the Completion date should be moved as a change in planned Completion date is defined as a delay to the Completion date.

But I doubt the employer wants this and if the contractor is happy to leave it where it is subject to getting prolongation costs, probably a mutually beneficial solution.
Andrew Flowerdew
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Oliver,

The contractor is entitled to compensation for the period of time that the planned Completion date moves, (Cl 63.3). Terminal float belongs to the contractor under this contract.

Wouldn’t be an EoT but prolongation costs could be claimed as part of the CE.
Oliver Melling
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Scenario,

Halfway through the project the critical path of the current plan is 1 month ahead of the baseline delivery date.

The client wants extra scope covering and so a change request is raised, this equates to one months extra work on the critical path.

The last accepted current plan (1 month ahead) is updated with the fragnet of the change (1month critical work) and the new baseline delivery is now the same as it was originally, but with extra scope.

Although the contractor gets paid more via the use of the CE, does this not remove the incentive for trying to work ahead of schedule?

If ’impacted as planned’ was used (ie no peformance) then the contractor retains the benefit they achieved? Or am i looking at it through contractor tinted glasses?
Andrew Flowerdew
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Oliver,

Could work in either parties favour but that’s in keeping with the general line of thought of some you win, some you lose, that runs through NEC contracts.

Why do it? Well one reason is because that’s what the contract tells you to do. You have a CE, you produce an revised programme to assess/demonstrate the effect of that CE - in a revised programme you’re required to enter actual progress achieved.

Does make sense though. By firstly updating the programme to the point in time that the CE occurred you are impacting the CE on the state of the site at the time the CE happened - therefore you are eliminating from the result all those things that have gone before. Cause and effect, (or potential effect), clearly demonstrated and as far as can be, isolated to the CE.
Oliver Melling
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Guys,

I would have thought that ’last accepted programme’ in terms of adding a CE, would be the last accepted baseline programme? (i.e. contract programme plus any previous change events/variations)

What benefit is there in using a plan updated with actual progress when the client is only adding extra work to the original scope?

Surely using a plan updated with actuals would give an unfair advantage to client/contractor dependant upon whether the project was ahead/behind of plan at the time the CE was raised. I can see the benefit of using the last accepted ’current’ programme during delay analysis, but not when adding a change event.
Andrew Flowerdew
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Stuart,

End of the day it’s all an educated guess really. NEC hasn’t been in court enough for anyone to have a definitive answer.

Sadly, due to people being guided by the NEC User’s Group, (not saying people shouldn’t be, but they sometimes seem to have a vested interest in the answers they give), and on top of that adjudication, it’s unlikely to get there anytime soon.

Next time you’re at an NEC presentation and they say that the NEC must be working well because there have been so few cases in court, ask them whether that’s a good thing or it’s just prolonging everbody’s confusion over what some things mean.

EVERY standard form of contract is in court less these days due to adjudication and no other standard form has had a User’s Group to give answers about it - whether they be right or wrong answers is yet to be seen.
Stuart Atkinson
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Andrew,

Thank you very much for your comprehensive answer. Unfortunately, that is where our method can be questioned- the reference to ’revised’ programme in 62.2, and what it entails under 32.1.

Thanks again Andrew,

Still surprised nobody else contributed.
Stuart Atkinson
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Andrew,

I would absolutely encourage at least the frequency stated in CD Part one for programme updates.

As for as-builts - clause 32.1.requests progress to be added.

I submit for acceptance on a monthly basis with as-builts added (which have previously been checked by the client).One a CE is issued we then go to the last accepted programme prior to the event and input the change and schedule to see the results, if any. No progress dates up to the time of the event are added- it is an uncorrupted ’last accepted programme’.
Andrew Flowerdew
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Stuart,

Swings and roundabouts - adding progress may be beneficial to you, it may not be! As I said, have been asked that question on more than one occassion, usually when it not’s been beneficial to do a progress update first.

I think the contract requires it because:

Under Cl16.1 Early warnings concern any matter which could delay the Completion date, (whether or not it is a Compensation Event).

Cl32.1 The Contractor shows on each revised programme:

1. The actual progress achieved ….

2. the effects of implemented compensation events and of notified early warning matters.

So each revised programme should contain actual progress, implemented compensation events and any matter which could delay the Completion date, (whether or not it is a Compensation Event).

I would interpret Cl32.1 as applying to all programmes submitted, the scope of the phrase “each revised programme” I would say is as wide as for example, “any revised programme”. I can’t think of an exception that would not be covered by the term “each”. Any new programme, whatever it’s purpose, if it had changes in it would be a revised programme if compared to the currently Accepted programme.

Cl62.2 If the programme for remaining work is altered by the compensation event, the Contractor includes a revised programme in his quotation - which takes us back to Cl32.1.

Other words that suggest progress has to be taken into account:

Cl32.2 “remaining work” would suggest that any work done to date should be accounted for first by updating progress. If there is no revised progamme submitted or Accepted Programme then Cl64.2 kicks in, which also refers to “remaining work”.

There are also odd bits that you could read as impacting the Accepted programme without a progress update but on balance, all clauses read as a whole, I think it points to progress update first. The undeniable intention of the contract is to use the programme as a management tool. To do this it needs to be up to date and reflect the postion on site. Therefore progress and events need to be incorporated in each revised programme.

Actually NEC3 is more arguable the other way but on balance I think the same applies.
Andrew Flowerdew
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Stuart,

I would say the ethos of NEC contracts is precisely to produce lots of programmes. Ongoing updates that reflect the state of play of the project and what is known as often as it’s needed. i.e, minimum usually monthly and in between whenever a compensation event or early warning occurs.

Progress is part of the revision process so although it’s the final impacted event programme that needs approval as an Accepted programme the change in completion date between the two would be what demonstrates the EoT so you probably would have to submit both.

As-built dates - from memory there’s nothing in NEC2 that calls for them to be put on the programme but I would always encourage people to build their as-built programme as the project goes along. Hugely cheaper than doing it retrospectively and if the dates are on the Accepted programme then you could ask the PM to agree them as you go - saving potential arguments later.
Stuart Atkinson
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This would create lots of programmes. Surely, the ethos of NEC is to move away from this?
Does this not assume that one you have progressed the programme, it would have to be accepted again before inputting any change?
As a matter of interest, would you put as-built dates in on your Accepted Programme after the data date, using information gained a week after the data date - hope this makes sense.

Thanks,

Stuart

P.S. Surely someone else is working on this form!
Andrew Flowerdew
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Stuart,

Have had this conversation with alot of people, personally I think you should enter progress first then impact the event as this is the only way to show the proper impact of the event but also:

Cl32.1 The Contractor shows on each revised programme:

* the actual progress achieved .....



Stuart Atkinson
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Andrew,

I appreciate your comment. I am aware of what contractual clauses that pertain. But the actual process of assessing any events can be quite subjective. For example, would you progress (or not) the Accepted Programme up to the time of the event and then input the change or, would you impact the Accepted Programme without progressing it?

I am just after some practical feedback on how the planning discipline view these forms and what methods are used.

Thanks,

Stuart
Andrew Flowerdew
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Stuart

Follow Cl 32.1 Revising the programme