Welcome to the third in our series of educational articles, providing you with practical insight into the various mechanisms in standard form contracts and their practical application.
In our blog in January 2023, we set out details of when a contractor is required to issue a revised programme under the NEC4 ECC terms of the contract. In this blog, we explain how, under NEC4, a programme submitted by a contractor is accepted, becoming the Accepted Programme.
Programmes issued for acceptance
Any programme identified in the Contract Data is automatically an Accepted Programme (clause 11.2(1)). Clause 11.2(1) also describes an Accepted Programme as including the latest programme accepted by the Project Manager.
When either a first programme or a revised programme has been issued by the contractor, the Project Manager has two weeks following submission of the programme to give a notice either accepting it or not accepting it (clause 31.3).
If the Project Manager fails to give a notice accepting or not accepting the programme within two weeks, the contractor may give notice to the Project Manager notifying him of that failure. If the Project Manager does not then notify acceptance or non-acceptance of the programme within a further seven days, then the programme is treated as accepted (clause 31.3).
The reasons for the Project Manager to not accept the programme are limited to the reasons set out at clause 31.3. These are:
- The Contractor’s plans which it shows are not practicable,
- It does not show the information that the contract requires (see our blog dated February 2023,
- It does not represent the Contractor’s plans realistically, or
- It does not comply with the Scope.
If the Project Manager withholds acceptance of a programme for a reason other than stated at clause 31.3, that withholding would itself be a compensation event (clause 60.1(9)). There could be circumstances where this leads to a financial claim by the contractor. That though is not the topic of this blog. Suffice to say here, if a Project Manager notifies non-acceptance of a programme for a reason which is not permitted, it would be wise to issue a compensation event notice under clause 61.3.
In our January 2023 blog, we explained that when a compensation event alters the programme for the remaining works, a revised programme is issued by the contractor with the compensation event quotation (clause 62.2). Under clause 62.3 the Project Manager has an option to accept the quotation, which in practice includes acceptance of the quotation programme. That gives rise to the question of whether acceptance of the quotation by the Project Manager results in the quotation programme becoming the Accepted Programme.
The issue to be considered is whether a quotation programme accepted as part of a quotation qualifies as “the latest programme accepted by the Project Manager” under clause 11.2(1), thus rendering it an Accepted Programme.
While the answer to this question is not abundantly clear from the drafting, quotation programmes are probably not intended to become Accepted Programmes. This is because when quotation programmes are accepted, it is likely the information within them would be out-of-date.
From the time a contractor is instructed to provide a quotation to the time it is accepted by the Project Manager is up to five weeks (clause 62.3). The Accepted Programme upon which the quotation programme will be based (clause 63.5) could therefore already be five weeks old when the quotation is accepted. Accordingly, it is probable that before the quotation is accepted a revised Accepted Programme would have come into being (assuming programmes are revised monthly). Thus, if a quotation programme were to become an Accepted Programme, it is probable it would contain out-of-date information.
In view of this, it is reasonably likely the drafters of NEC4 did not intend for accepted quotation programmes to become an Accepted Programme. Instead, it appears clause 31.3 provides the only mechanism for revised programmes to become Accepted Programmes.
In summary, a programme becomes an Accepted Programme when:
- It is identified in the Contract Data (clause 11.2(1))
- It is Accepted by the Project Manager (clause 31.3)
- It is treated as accepted if the Project Manager fails to respond when the contractor submits a programme (clause 31.3)
Standard contracts explained
Look out for more in our series in the coming weeks and months where we will be providing practical insight into the various mechanisms in standard form contracts, to help businesses navigate the complexities involved in administering those contracts.
If you need any further information or specific advice, please contact us.
Warren Berwick, Director, Berwick Law
Tel: 07825 171 925
As with all our blogs, these are intended to share general information. If you have any specific contractual issues, you should take specific legal advice.