NEC

Question 1

What is required to be included in an accepted programme?

Answer 1

1. Starting date, access dates, Key Dates and Completion Date
2. Planned Completion
3. The order and timing of the operations which the Contractor plans to do in order to provide the Works
4. Provision for float, time risk allowances
5. The dates when the Contractor will need access by the Client

Question 2

What is float?

Answer 2

It is a gap between the activities that allow them to be delayed without causing critical delay to the end date of the programme.

(Float up to Planned Completion)

Question 3

What is terminal float?

Answer 3

It is defined in the NEC as being “owned” by the Contractor.

It is where the contractor is able to show planned completion prior to contract completion.

(Float between Planned Completion and Contract Completion)

Question 4

What is time risk allowance? (TRA)

Answer 4

time-risk allowance is the proportion of an activity duration that has been assessed by the Contractor as their risk they have allowed for.

Question 5

Once a programme has been submitted, how long does the PM have to respond? and what if he does not respond in that timeframe.

Answer 5

2 weeks to respond

In NEC4, the Contractor can notify the PM under 31.3 of his failure to respond, if there is still no response after 1 week, the programme is deemed accepted.

Question 6

What grounds does the PM have for rejecting a programme?

Answer 6

1. Plans are not practicable (starting activity prior to one finishing which is impossible)
2. It does not show the information which the contract requires (does not show float, TRA, Key Dates etc.)
3. It does not represent the contractors plans realistically (works that are already complete, 8 operatives required whereas 2 on site)
4. It does not comply with the works information (something specifically required in the WI is not shown)

P
D
R
W

Question 7

Explain the W clauses in the NEC Contract

Answer 7

W1 is for use on projects that are not subject to the Housing Grants, Construction and Regeneration Act 1996

W2 is for use on UK projects where the parties are parties to a construction contract and are subject to the Construction Act 1996

Question 8

What is the process under W2 for a Party to refer a dispute?

Answer 8

1. Notice of dispute (Day 1) - formally notified to the other party
2. Referral to adjudication (Within 7 days of notification) - Referring party must refer to the adjudicator with detailed info and supporting documentation.
3. Response by the other Party (Within 14 days of the referral) - The responding party submits their response to the Adjudicator.
4. Adjudicators decision (Within 28 days of the referral) - The Adjudicator provides a decision. This period can be extended by 14 days with the consent of the referring party, or longer if both parties agree.

Question 9

What are the adjudicators rights under W2?

Answer 9

Review and revise any action or inaction of the Project Manager to alter a quotation which has been treated as accepted.

Instruct a party to provide further information within a stated time

Question 10

What is Defined Cost under an NEC Option C Contract?

Answer 10

the amount of payments due to Subcontractors for work which is subcontracted
without taking account of amounts deducted for

• retention
• the correction of Defects after Completion
• the supply of equipment, supplies and services included in the charge for overhead cost within the Working Areas in the contract.

and

• the cost of components in the SOCC for other work

less Disallowed Cost

Question 11

What is Disallowed Cost?

Answer 11

Disallowed Cost is cost which the Project Manager decides:

• is not justified by the Contractor’s accounts and records
• should not have been paid to a Subcontractor or supplier in accordance
  with his contract,
• was incurred only because the Contractor did not give an early warning which this contract required him to give

and

• correcting Defects after Completion,
• correcting Defects caused by the Contractor not complying with a
  constraint on how he is to Provide the Works stated in the Works
  Information
• resources not used to Provide the Works

Question 12

What is the Price for Work Done to Date for Option C?

Answer 12

The total Defined Cost which the Project Manager forecasts will have been paid by the Contractor before the next assessment date plus the Fee

Question 13

What is Clause 111 of the Construction Act 1996?

Answer 13

Notice of intention to withhold payment.

Question 14

What is a Patent Defect?

Answer 14

A patent defect is one that can be seen or is apparent upon inspection by a person with relevant experience or expertise

Question 15

What is a Defect?

Answer 15

a part of the works which is not in accordance with the Works Information

Question 16

What is a Latent Defect?

Answer 16

A latent defect is one that exists but is hidden to the extent that it would not be discoverable from an inspection before completion

Question 17

What are the stages of a compensation event, with clause references?

Answer 17

Clause 60 - CE definitions
Clause 61- Notifying
Clause 62 - Quotations
Clause 63 - Assessing
Clause 64 - PMA’s
Clause 65 - Implementation

Question 18

What are the reasons for rejecting a CE?

Answer 18

. arises from a fault of the Contractor,
. has not happened and is not expected to happen,
. has no effect upon Defined Cost, Completion or meeting a Key Date or
. is not one of the compensation events stated in this contract

Question 19

How long does a Contractor get to submit a quotation after being instructed to do so? & how long does the PM have to reply?

Answer 19

Quotation submitted within 3 weeks
PM replies within 2 weeks

Question 20

What is the difference in Liquidated Damages and Damages at large?

Answer 20

LD’s are defined in the contract.
GD’s are a penalty for late completion based on actual losses incurred which is defined by the Courts.

Question 21

What is the Price for Work Done to Date for Option A?

Answer 21

The total of the Prices for completed activites without defects that cause delay to following work.

Question 22

What is the time bar clause under NEC3? and how long is it before a party has to notify?

Answer 22

61.3 - 8 weeks

Question 23

What is the Site Information under NEC3?

Answer 23

Site Information includes information about the Site and its surroundings. It is not specific to the work that is to be carried out on the Site; it is simply factual information

Question 24

What is a rejoinder?

Answer 24

This is the document submitted by the party who initially referred the dispute (the claimant) in response to the respondent’s reply to their initial claim.

Question 25

What is a surrejoinder?

Answer 25

This is the subsequent document submitted by the respondent in response to the claimant’s rejoinder.