NEC4 Contracts and Covid-19

Summary

Billy Higgins, chairman of the LEC for contract board, addresses the impact of COVID-19 on construction projects using the NEC framework. He highlights the varying effects of the virus based on location and type of work, emphasizing the importance of early warnings and proactive management in existing contracts. Higgins discusses the role of project managers in navigating disruptions and the necessity of clear communication for future contracts. The presentation underscores the need for adaptable terms to effectively manage challenges posed by the pandemic in the construction industry.

Takeaways

• 😀 The impact of coronavirus on construction projects varies by location and type of work.
• 😀 Health and safety of the workforce must be prioritized, adhering to government guidelines.
• 😀 Early warning notifications between project managers and contractors are essential for managing risks.
• 😀 Clause 19 of the Engineering Construction Contract addresses compensation events related to delays caused by the virus.
• 😀 Project managers should actively manage the project's interests and make informed decisions regarding work progress.
• 😀 Service contracts differ from construction contracts, lacking a completion concept, necessitating different management approaches.
• 😀 New contracts should clearly outline the handling of coronavirus-related issues and potential adaptations.
• 😀 Regular early warning meetings should be held to review circumstances and decide on necessary adjustments.
• 😀 Communication between clients and project managers is crucial to navigate changes effectively.
• 😀 The process for addressing coronavirus in contracts should be well-defined to mitigate future risks.

Q & A

What is the main focus of Billy Higgins's presentation?

Billy Higgins focuses on the impact of coronavirus on construction projects using NEC contracts, particularly the engineering construction contract.

What should project managers do when faced with potential delays due to COVID-19?

Project managers should issue early warnings and hold meetings to discuss the situation, assess options, and manage risks effectively.

How does the impact of coronavirus on construction projects vary?

The impact varies by location, type of work, and specific government restrictions, which can range from minor sick leaves to complete site closures.

What is Clause 19 in the context of NEC contracts?

Clause 19 deals with situations where an event stops the completion of work by the completion date and outlines the criteria for a compensation event.

What should be done if an event does not stop project completion but still causes difficulties?

The contractor should notify the project manager, and an early warning meeting should be held to discuss how to address the significant difficulties.

What is the role of the project manager during a disruption caused by COVID-19?

The project manager takes control of the situation, makes decisions in the interest of the project, and consults with the client on how to proceed.

How do short contracts differ from standard NEC contracts in handling disruptions?

Short contracts do not include Clause 19 and generally rely on the parties to manage issues in a more flexible manner, although they still include provisions for compensation events.

What considerations should be made for contracts not yet awarded in light of COVID-19?

Contracts should clearly outline how to handle COVID-19 impacts and specify how processes may change as the situation evolves.

Why is health and safety a crucial concern on construction sites during the pandemic?

Health and safety are vital to ensure that workers can operate with minimal risk of virus transmission, which is impacted by government guidelines such as social distancing.

What approach should clients take to manage projects during the pandemic?

Clients should actively manage the process, hold early warning meetings, and provide clear instructions to adapt to changing conditions.