THE PFE CHANGE MANAGEMENT SUPPLEMENT
FOR USE WITH THE DELAY AND DISRUPTION PROTOCOL
WHAT THE SUB-CONTRACTOR NEEDS TO KNOW!
In previous
articles, we have commented on the
“Delay and Disruption Protocol”, published by the Society of
Construction Law. A supplement is now available to incorporate
the key features of the protocol into the JCT forms of contract. It is the PFE
Change Management Supplement, jointly produced by the specialist firms of
Pickavance Consulting and Fenwick Elliott.
No doubt this will begin to filter down into new enquiries very
soon. To proceed in ignorance is to
court disaster! Here are some key headlines.
Essential elements
of the supplement
The essential
elements reflect the protocol itself, and include:
·
Early agreement of a
detailed baseline programme with method statements.
·
Regular monitoring
with progress reports.
·
Provisions for
instruction to accelerate .programme.
·
Prompt
identification and recording of time and money events as they become apparent
·
Interim adjustment of
time and money as the works proceed
Similarity to the
NEC contract
The philosophy and mechanisms appear similar to the NEC
contract, with its emphasis on rigid time limits for various actions by the
parties. This also applies to the benefits and disadvantages. There are plenty
of both.
Risk manager
A new figure is the
risk manager, who plays a central role in advising the employer or architect on
every aspect of time management. The architect may undertake both roles, if so
designated. Ascertainment of loss and expense remains with the architect and/or
quantity surveyor.
Updated master
programme
A master programme
is to be established at the outset. All programmes and updates must be prepared
in critical path format and transmitted electronically, using approved
software. Programmes must be updated at pre-stated intervals and every time an
employer’s time risk event occurs. The contractor is liable to damages if he
defaults in these duties.
Final update
Within 14 days
of practical completion, the contractor
must publish his final update of the master programme, recording actual
sequences and durations of every activity, including effects of employer’s time risk events. Within a further 28 days, he must calculate full details of each
employer’s cost risk event and delays to progress, and submit the resultant
programme. The risk manager then has 28
days to advise the architect, so that any
loss and expense may be ascertained.
If the contractor fails to comply, the architect has powers to employ others
and deduct the costs from the contractor.
Management
information
The precise format,
extent and timing of the progress
reports and site records will be set down in the contract agreement. The information will include labour, plant, subcontractor work on site,
delivery of materials, instructions issued, weather conditions and any delays
occurring. All this information is to be submitted by the contractor at
pre-stated periods. Again, there are
financial penalties for non compliance.
Acceleration
Most JCT standard forms make no provision for
acceleration. The supplement enables acceleration to be instructed, albeit
after due consultation. If the contractor is in culpable delay, then there is
no reimbursement of costs. In the case of excusable delay, the instruction
counts as a payable variation for which
the contractor must keep contemporary records of costs. If the contractor fails
to comply with an instruction to accelerate, he becomes liable for damages.
Benefits and
disadvantages
The obvious benefits
include improved management of change, improved cash flow and minimising of
“end of job” disputes. Disadvantages
include compliance with the strict requirements and time limits, and the
inevitable need for increased technical staff (particularly planners). Like the NEC contract, there is a
possibility that these procedures may lack the flexibility to cope with a
proliferation of delays and variations.
The demand for an updating of programme for each and every employer’s
time risk event could prove unachievable. In such cases, the contractor could
well lose his legitimate entitlements and incur financial damages from the
employer in the process.
The sub-contractor
The supplement
advises that any necessary linkage should be built into subcontracts. Indeed,
if the contractor is to comply with the strict regime of programmes, notices
and reports it will be essential.
Subcontractors must ensure that they comply from the outset. Any default will result in loss of
entitlements and incurrence of damages.
Additional technical staff will be necessary, notably planners. The acceleration arrangements require
particular consideration. It is possible that the contractor may be in culpable
delay and be instructed to accelerate at his own cost. However, the
subcontractor may well have legitimate
entitlements to compensation for the same period of delay. Subcontractors
should carefully check the wording of any clauses which purport to pass the
supplement’s provisions down the line.
To find out more about
the Delay and Disruption Protocol, please visit my web site at : www.jrconsultant.co.uk
John Russell
(Based on an article
published in the “Contract Law” column of “Electrical Times” – July 2004)
Back to Jack Russell column contents
John Russell
Construction Contracts & Training
Consultants (Established 1984)
Cheshire CW4 7DP Tel : 07770 986444
Email :
swsubbie@globalnet.co.uk Website:
www.jrconsultant.co.uk