Ben Walker | 31 Aug 2014
CEMARs approach - keeping NEC3 early warnings exactly that! Early warnings are not - compensation events – The contract is quite clear not to conflate the two processes. Early warnings, the Risk Register and risk reduction meetings are about proactive, collaborative mitigation and avoidance of risk. Compensation events are the mechanism to compensate the Contractor for matters that are not his risk. So the scope of early warnings is much broader than compensation events. You don’t need an early warning to prequalify a compensation event. However the sanction under clause 61.5/63.5 reinforces the obligation to be forthcoming with early warning notifications. Project Managers should be notifying early warnings too! Commercial pre-positioning, typical examples that I’ve witnessed – Early warning notifications (EWN’s) sent quoting clauses relating to compensation events – as my colleague says’ “…they are 44 clauses away in the contract for a reason!”. EWN’s stating that cost and time implications will be advised at a later date inferring that they are inevitable. Including any estimate of cost and time in an EWN is potentially “inflammatory” and in my experience clouds judgement and inhibits the risk reduction process designed to avoid these outcomes. EWN’s which arbitrarily and unilaterally allocate commercial risk regardless of the event and how it might already be catered for in the contract either through core clause 6 (compensation events), 8 (risks and insurance) or Z-clauses. The Risk Register is a management tool, NOT a contract document. It does not and cannot allocate risks or price them. These actions breed counter-intuitive behaviours – we’ve probably all seen Project Manager’s and Employer’s wince at early warnings from the Contractor, when in fact they should be inviting and embracing them. Other strange behaviours include the receiving party’s ‘acceptance’ or ‘rejection’ – which is a nonsense. A war of attrition! – “I saw the Contractor sent over 5 EWN’s this morning, make sure you fire back a dozen this afternoon!” – this is an actual quote directed at me as Project Manager and from experience is often the perception of early warnings – whoever has raised the most is winning the game! This website uses cookies to ensure you get the best experience on our website. Read More So now we’ve established what early warnings are not let’s look at what they actually are and how best to manage them in a way the contract envisages and also with some good project management diligence.
Accept