EEC contract: Get with the programme

John Redmond wrote earlier this year (2 May, page 63) about the importance of properly resourcing NEC-based projects procured by the Olympic Delivery Authority. Martin Barnes is quoted in the article as expressing the view that he wasn’t really concerned about the potential shortage of project managers, as all that was necessary was an appreciation of the NEC’s aims. This may prove optimistic.

Take the most popular form of the NEC, the ECC. As any veteran of a successful ECC project will tell you, during the construction stage there is no let up in the requirements for paperwork and meetings. This may seem (and is often perceived by project staff to be) contrary to good management, but the ECC is designed to flag up problems, get them discussed, and promote a solution in terms of time, cost and quality impacts, then move on to the next issue.

It is therefore essential that all participants in an ECC project see the contract procedures, such as the early warning mechanism, timescales for communication and the detailed requirements for programmes, as real-time systems to achieve consistency in time, cost and quality.

The issue of programmes is of particular interest. The contractor is required to submit a first programme to the project manager for acceptance at the commencement of the project. This is then periodically updated by the contractor and the project manager is required (under option A) to either accept the programme or give reasons for not accepting within two weeks. The complexity of these tasks should not be underestimated.

But that isn’t the end of it. The ECC’s compensation event procedure also requires programmes to be submitted with quotations identifying the time impact of each compensation event. The contractor’s programmer therefore has another slew of programmes to prepare (and update on the project programme).

The project manager must review each programme, and his role requires both a detailed knowledge of how projects are built, delayed and disrupted and how this is simulated by critical path software.

Careful and continuous programming is essential to the management of an ECC project

Solicitor Osborne Clarke and QS Cyril Sweett recently conducted a snapshot survey of contractors that use the ECC. Although it was clear that contractors are becoming more proficient at operating the ECC, there was still considerable misunderstanding of the philosophy behind it and its heavy programme requirements. Without an understanding of these principles it will be difficult to train and motivate project staff to use the systems embedded in the ECC.

Moreover, virtually none of the contractors surveyed employed a full-time programmer on ECC-based projects, partly because of a shortage of programming resources. The same is probably true of employers and their site teams. In our experience, the majority of ECC-related claims do not have contemporaneously prepared programmes.

Careful and continuous programming is essential to the successful management of an ECC project. The ECC is designed to manage construction actively and to achieve certainty by avoiding a final account mentality. Long-range planning and forecasting is vital. The process is fast and furious. The threat of time bars on late notification of change drives prompt resolution, rather than leaving things to the end. Feedback from contractors confirms the difficulty of forecasting time and time-related cost without adequate planners at site level.

In our experience, inadequate programming resources are a real problem to the successful administration of compensation events and undermine one of the key reasons for using the ECC: effective change management. One wonders if the economic downturn will make things worse, with all parties trying to cut down on site staff.

The ECC philosophy is fundamentally different to traditional construction contracts and it is vital that projects have sufficient and well-trained staff in place who understand ECC thinking. This requires an active approach that is based on good pre-contract preparation and rapid post-contract planning and forecasting.