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Getting to Grips with the NEC Engineering and Construction Contract

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Getting to Grips with the NEC Engineering and Construction Contract 2 sa[ice] Joint Civils Division Getting to grips with the NEC Engineering and Construction Contract - A day with Dr Martin Barnes, the originator of the NEC - Midrand 26 August 2009 Information and briefing pack 1 Conference programme 2 Profile of presenters 3 Powerpoint handouts of presentations Session 1: Why use the NEC on a construction project? (Dr Martin Barnes) Session 2: Target cost contracts and their potential application in South Africa (Dr Ron Watermeyer) Session 3: Getting the best out of using the NEC (Dr Martin Barnes) Session 4: Assessing compensation events (Andrew Baird) Session 5: Implementing the NEC Contracting System (Dr Marin Barnes 4 Reference material 4.1 Martin Barnes (1999). Smeaton to Egan - The Extraordinary History of Civil Engineering Management (ICE 1999 Smeaton Lecture) 4.2 Ron Watermeyer (2009), Getting to grips with the NEC3 ECC target contract with activity schedule. Civil Engineering. January / February. 4.3 Ron Watermeyer and Inba Thumbiran (2009). Delivering infrastructure at scale in developing countries: numbers or systems? The Fourth Built Environment Conference hosted by ASOCSA, Livingston, Zambia, May. 4.4 Andrew Baird (2009). Assessing compensation events in NEC Engineering and Construction Contract (ECC3) Option A & B 5 NEC Users’ Group News Letters (http://www.neccontract.com/news/index.asp?Type=Newsletters) Issue 47 July 2009 Issue 46 April 2009 Issue 45 January 2009 Issue 43 July 2008 Dr Martin Barnes CBE FREng BSc(Eng) PhD FICE FCIOB HonFAPM FInstCES CCMI Martin Barnes has been working in project management for the last 30 years. The management consulting business which he founded merged with what is now PricewaterhouseCoopers in 1985. Since 1996 he has been an independent consultant. Martin Barnes has advised many of the largest businesses and other undertakings on project management and other matters, both in the U.K. and elsewhere. He specialises in the organisational and human aspects of project management, contracts, risk management, funding and procurement and financial control. He has carried out many assignments in the public sector and for government bodies. He has been a project management adviser to the World Bank and other international lending agencies. He has investigated the management of many projects in the defence, engineering and construction sectors. Dr Barnes has been responsible for a number of developments in civil engineering project management technique now widely used. He designed and compiled the first edition of the Civil Engineering Standard Method of Measurement in the 1970s. He also led the team which conceived, designed wrote the first edition of the New Engineering Contract (the NEC). The NEC is the only standard contract system designed to stimulate application of modern, collaborative project management techniques around all the organisations involved in a project and to shrink the likelihood of disputes. Martin Barnes is President and a former Chairman of the Association for Project Management, the professional body for project managers in the UK. He is a former President of the Institution of Civil Engineering Surveyors. He is a former Chairman of the Council of the International Project Management Association. He was Executive Director of the Major Projects Association from 1997 to 2006. He is an associate fellow of the Saïd Business School, University of Oxford. He is a recipient of the Chartered Institute of Management’s Special Award and of the Institution of Civil Engineer’s Watson Medal, President’s Medal and Spirit of Telford Award, all for his personal contribution to the development of project management methods and techniques. He is a Churchill Fellow. He is chairman of the Independent Disputes Avoidance Panel for the London 2012 Olympics programme. He was made CBE in the Queen’s Birthday Honours 2009 for services to civil engineering. Dr Ron Watermeyer CEng, PrEng, PrCM, PrCPM, BScEng, DEng,, FSAICE, FIStructE, FICE Ron Watermeyer commenced his career with the South African Railways and Harbours (now Transnet Limited) where he was exposed to most facets of civil engineering during the construction of the Sentrarand Marshalling Yard Complex at Bapsfontein, In 1984 he moved to the Structural Design Office where he gained extensive experience in the design of structures in masonry, timber, steel and concrete. In 1988 he joined the firm, Soderlund and Schutte and became a director in 1990. Ron has been at the forefront of many development initiatives in South Africa since the early 1990s including the reinterpretation of building regulations, the classification of sites in terms of geotechnical characteristics and building practice, changing construction methods, technologies and practices to facilitate socio- economic development imperatives and the conceptualisation and implementation of a construction procurement system to reflect societal expectations. He has developed many South African National Standards and is currently leading the development of ISO standards for construction procurement, based on his pioneering work in South Africa. He has authored and co-authored over 70 papers on a range of topics. In 2009 he was awarded a senior doctorate (Doctor of Engineering) from the University of the Witwatersrand for his published work on contributions to the delivery of infrastructure for the advancement of a changing South African society. Dr Ron Watermeyer has served as a board member of Agrément South Africa (1999-2004), a vice president of IStructE in 2001/02 and SAICE’s 101st President in 2004. He has chaired Standards South Africa’s Technical Committee for Construction Standards since 2000 and has been a Trustee of Engineers Against Poverty (UK registered charity) since 2005. He has received the SAICE 1999 President's award, the SABS 2005 Standards Development Award and the Institution of Structural Engineer’s 2009 Lewis Kent Award (premier service award). Andrew Baird CEng, PrEng, BScHons MSAICE, FICE, MAPM Andrew Baird founded Engineering Contract Strategies (ECS) in 1993 to provide independent professional services on contracts to all sectors of the engineering and construction industry. Andrew’s background includes work in the design office on a variety of hydro electric and tunnelling projects in UK, USA and South Africa, and several years experience on construction sites with major contractors. This included work on most prestressed concrete structures, large diameter concrete pipelines, process plants and power stations. His senior level appointments included factory manager, and Group Technical Manager for a pipe manufacturer, Project Engineer and Project Manager on a wide range of major engineering projects in Libya, including the deep water harbour and Fast Attack Naval Base project in the Gulf of Sirte. Since settling permanently in South Africa in 1982, he has been both project engineer and project manager on a number Eskom projects, including Tutuka, Majuba, Palmiet and Koeberg Power Stations and headed the civil and building project management function in Eskom’s then Engineering Group. In 1989 he was made a Corporate Consultant for the procurement and contract management affairs of Eskom, a position he held for 8 years. It was during this time that he became involved in the early development of the New Engineering Contract, and with Eskom’s support was seconded to the UK to assist with the final development right up to publication of the first edition in 1993. Andrew has been a member of the New Engineering Contract drafting Panel for the Institution of Civil Engineers in London since inception and has had a substantial role in drafting most of the NEC3 family of documents. He is on the executive committee of the Joint Civils Division at SAICE, co-author of the book, NEC and Partnering: The Guide to Building Winning Teams, and has been invited as a guest speaker at conferences in many parts of the world. Session 1 The drivers for the creation of the Why use the NEC on a NEC construction project? • The standard contracts in use before NEC Dr Martin Barnes was published did not include or accommodate any part of project CBE FREng FICE management technique The drivers for the creation of the NEC • They motivated behaviour which was The distinguishing features of the NEC unhelpful to project success The benefits from using the NEC on a project Dr Martin Barnes Dr Martin Barnes 26 August 2009 26 August 2009 Problems with traditional contracts (FIDIC, ICE, RIBA JCT, IChemE, Problems with traditional contracts etc.) • A climate of dispute on too many projects • No way of trading off cost and time • Too many disputes went to arbitration or the implications of problems courts • No certainty of completion date or final cost • The client lost control as soon as the main • Quite different contracts used all around the contract was signed supply chain • No way for the client to control how risks or • Contract language hopelessly complicated variations were managed and vague Dr Martin Barnes Dr Martin Barnes 26 August 2009 26 August 2009 Problems with traditional contracts Problems with traditional contracts • Contract structure confusing - cross • Had to use a bill of quantities - complicated references and irrational system • Conflicting motives of ‘engineer’ or • Inflexible – could not use for cost ‘architect’ reimbursable, management or target cost • Independent or client’s man? contracts • Designer, technical expert or project • Settlement of final accounts took a very manager? long time after completion • Narrow
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