{
  "query": "NEC4 contract NCE without Early Warning risk implication",
  "raw_results": [
    {
      "url": "https://reachback.builtintelligence.com/t/ce-vs-early-warning-advice/20911",
      "title": "CE vs Early Warning advice - NEC3 and NEC4 Contracts - ReachBack",
      "content": "Hi Andy,\n\nThe item is a client risk/liability for a fault in the design, although could arguably be 60.1.18 also.\n\nI guess our issue is proceeding with it and then not getting paid for it at a later date if it’s not officially gone through the process.\n\nThanks for clarity on non requirement to EW.\n\nWe are proceeding with it and can debate the case for payment, but was just wanting to get some insight on the EW/CE process which has been helpful.\n\nThank you.\n\n### Related topics [...] Any thoughts from the community on this?\n\nThat sounds like a CE to me, although I’m maybe a bit surprised you think its 60.1(14). The test here is not whether the CE has happened. You can only reject if the CE ‘has not happened and is not expected to happen’. It could be that this has not happened yet, but it is expected to happen. It seems that both parties agree that there is extra cost - so why not get on with it?\n\nYou also don’t need to Early Warn this, because per 15.1 EW is not required for things already notified as CE.\n\nAs for the dayworks element, NEC does not support that approach, so be aware of the pitfalls there. The closest NEC gets to ‘dayworks’ is using PM’s assumptions, and then having other CEs to correct the assumption.\n\nHi Andy, [...] We disagree with this as we feel the PM is negating our time/money (albeit not known yet) to the EW process which is not a vehicle for recovery, the mechanisms to recover are via the CE process. We believe this to be a valid CE with a valid notification with quantum and value to be determined. If we proceed on dayworks when it’s not recognised as a CE, there is a risk we do not get paid.\n\nAny thoughts from the community on this?",
      "score": 0.46322632,
      "raw_content": null
    },
    {
      "url": "https://www.linkedin.com/posts/walkerben1_nec4-early-warning-5-common-misconceptions-activity-7292574630127517696-niye",
      "title": "You give EW by notifying as soon as you become… | Ben Walker",
      "content": "Great stuff Ben…. In my NEC training I always say don’t ever say ‘early warning’ and ‘compensation event’ in the same sentence… of course, without an early warning 1-may be some disallowed costs coming your way or 2-Compensation events might be assessed at a lesser value! As to your post (with 25+ years of project experiences) 1-chance of the PM sending an early warning = 5% (unless it’s warning about a contra-charge!!) 2-chance of client entering anything in data part one about risks = 5% (same applies to entries in data part two too!) 3-the amount of early warnings I’ve seen “rejected” = far too many to mention !! Everyone - early warnings are a good thing - risk management is a good thing - avoiding and mitigating risks (and the consequences) is a good thing! Nice post Ben ! [...] ⚠️ NEC4 early warning - 5 common misconceptions. ⚠️ ❌Must notify an early warning (EW) before notifying a compensation event (CE).❌ 💡Not true. -You give EW by notifying as soon as you become aware of any matter that ‘could …’. This procedure deals with uncertainty. -If you believe the matter is a CE, then notify a CE. Early warning of a matter for which a CE has previously been notified is not required. -However, it can be helpful to notify any residual uncertainty and take advantage of the collaborative procedure and register. ❌Matters listed in Contract Data part one for inclusion in the Early Warning Register are at the risk of the Client.❌ 💡Incorrect. -The Early Warning Register (EWR) is not a contract document and does not exist prior to Contract Date. The EWR is a management tool. [...] Reply  25 Reactions   26 Reactions\n\nJamie Orme   10mo \n\n Report this comment\n\nThe \"i didnt submit an early warning or compensation event on time because we were waiting for costs\" is one of them grinds my gears issues\n\nLike Reply  3 Reactions   4 Reactions\n\nSylvia K W.   10mo \n\n Report this comment\n\nGreat list of misconceptions. Too many NEC users assume they must respond to EWNs in the period of reply, something that's really not a requirement under the contract but has creeped into use because of the various contract management systems.\n\nLike Reply  3 Reactions   4 Reactions\n\nDanny Jones   10mo \n\n Report this comment",
      "score": 0.45449692,
      "raw_content": null
    },
    {
      "url": "https://builtintelligence.com/early-warning-nec4/",
      "title": "Early Warnings In NEC4: Why They Still Come In Too Late",
      "content": "What an Early Warning is not\n\nAn early warning is a risk management tool. It flags a matter early so the parties can manage it together. A Compensation Event notification is part of the change management and entitlement process.\n\nRaising an early warning does not automatically notify a Compensation Event. Likewise, notifying a Compensation Event does not in itself satisfy the early warning process. However, NEC4 also states that an early warning is not required for a matter for which a Compensation Event has previously been notified.\n\nAn early warning is not a change to the Scope, does not allocate risk between the parties, and should not be confused with a project risk register.\n\nThe Early Warning Register [...] 1. Using RFIs or TQs as a substitute for early warnings\n\nRequests for Information and Technical Queries are not early warnings. Where a matter raised through an RFI or TQ is becoming urgent or may affect time or cost, a separate early warning should be issued.\n\nSolution: Review all live RFIs and TQs regularly. Where any has a potential time or cost implication, raise an early warning without delay.\n\n1. Treating the Early Warning Register as a blame log\n\nWhere the Early Warning Register is used as a defensive or adversarial tool, the collaborative purpose of the process is lost and the project suffers.\n\nSolution: Keep the focus on actions, decisions, and outcomes. The Early Warning Register should answer what needs to happen next, not who is responsible for what has already gone wrong. [...] Where the Project Manager states in the instruction to submit quotations that the Contractor did not give an early warning of a matter that an experienced contractor could have given, the Compensation Event is assessed as if the Contractor had given that early warning. In practice, this can reduce the assessment to reflect what the impact would have been had the matter been raised and managed earlier.\n\nOn cost-based options, failure to give an early warning may also have cost consequences in some cases.\n\nThe message is straightforward. Failing to notify is not a neutral act. It can directly affect recovery.\n\nCommon Mistakes and How to Avoid Them\n\n1. Raising early warnings too late",
      "score": 0.30837816,
      "raw_content": null
    },
    {
      "url": "https://gmhplanning.co.uk/nec-guidance-notes/nec-ecc-clause-16-early-warnings/",
      "title": "ECC Section 15 - Early Warnings - NEC Guidance Note",
      "content": "Skip to content\n\nGMH Planning Ltd NEC Training NEC3 NEC4 Contract Consultancy Logo\n\nGMH Planning – NEC Training\n\nExperts in the New Engineering Contract\n\nshopping\\_cart\n\nNEC4 Training Training Courses\")  NEC4 Public Training  NEC Advice Advice and Project Planning Guidance\")  NEC Guidance Notes  Free Downloads  NEC FAQs  NEC People Conference  NEC4 Webinar  Blog  Contact\n\nNEC Guidance Notes \n\nNEC EECC Section 15 Early Warnings NEC Guidance Note\n\n# ECC Section 15 – Early Warnings\n\n timer   7 Minutes read time\n tag   Early warnings\n\nThe early warning process is a mechanism for both parties to identify potential problems to the project. The contract emphasises that both Parties are obliged to notify the other as soon as they become aware of a matter that could affect time, cost or quality. [...] It is worth noting that NEC4 has introduced some subtle changes compared to that of NEC3. This simple table shows some of the key changes which is more about terminology change rather than process change:\n\nNEC4                                                NEC3\n\nSection 15 of contract                Section 16 of contract\n\nEarly warning meetings             Risk reduction meetings\n\nEarly Warning Register               Risk Register [...] A common question asked associated with managing ECC contracts is “what should be shown on the programme in terms of early warnings”.  Previously NEC2 and the first edition of NEC3 stated that as part of a revised programme the Contractor should show “the effects of notified early warning matters”. This was subsequently removed in the NEC3 June 2006 amendments. The reason that this was removed is that many Contractors were showing possible effects of matters that were not certain to happen, and in some cases changing planned Completion accordingly. The result was that planned Completion was moving in and out in time with events and durations that were potential effects rather than certain ones. The main premise of an early warning is that it is an event that could affect time or cost, not",
      "score": 0.30130085,
      "raw_content": null
    },
    {
      "url": "https://www.linkedin.com/posts/metroun_how-to-raise-an-early-warning-under-an-nec4-activity-7298280350462472193-FgbA",
      "title": "How to Raise an Early Warning Under an NEC4 Contract | Metroun Quantity Surveyors",
      "content": "likelihood, and on this axis, we've got the consequence. So we'll say that the likelihood of this is quite high and the consequence of this is also very high. So we can see this is a major event. So we'll click create and you can see in the top right hand corner that it's working on creating that early warning for us. The great thing about this software is you don't need to create anything from scratch. It does all automatically for you. So here you can see this is early warning 5. Stone, Peter, When we raised it and who raised it, the status of the early warning. And again, if you look in actions, we can see it's nice and clearly defined here. So we've got the contract title, the contract type. The title of the early warning. The description of the early warning, um. What the risk [...] of the NEC 4 ECC or close 16.1 in NEC 3. OK, so now you know what early warning is. Who can raise an early warning? Both the contractor and client can raise an early warning if they foresee a potential risk that could affect the contract. It's important to remember that early warnings should be raised as soon as the issue is identified. Failure to do so could result in cost implications and disputes later. OK, let's pop onto the metro and contract management software and we can see how to raise an early warning. Raising an early warning follows a structured process under the NEC framework. First of all, we need to identify the issue. Before raising the early warning, we need to consider if the issue is likely to impact the project's cost, time or quality. Next, we need to notify the other [...] Enhancing Operational Resilience: Navigating Emerging Risks and Strengthening Business Continuity   thebci.org\n\n  7\n\n  Like   Comment\n\n  To view or add a comment, sign in\n Basil Aldagen 📈\n\n  + Report this post\n\n  Contract risk can be defined as risk of losses resulting from inadequate or failed contracting management process. In this visual I list 10 contract risks and how to control, these risks are very likely to be faced by any organization financial or nonfinancial. Do you think contract risk is ? 1️⃣ Overstated (exaggerated) 2️⃣ Understated (downplayed) 3️⃣ Accurately stated (Balanced) #RiskManagement #TPRM #ERM #ContractRisk #GRC\n\n  22\n\n  Like   Comment\n\n  To view or add a comment, sign in\n Saurabbh Sagar\n\n  + Report this post",
      "score": 0.28962326,
      "raw_content": null
    }
  ],
  "formatted": "Source: CE vs Early Warning advice - NEC3 and NEC4 Contracts - ReachBack\nURL: https://reachback.builtintelligence.com/t/ce-vs-early-warning-advice/20911\nHi Andy, The item is a client risk/liability for a fault in the design, although could arguably be 60.1.18 also. I guess our issue is proceeding with it and then not getting paid for it at a later date if it’s not officially gone through the process. Thanks for clarity on non requirement to EW. We are proceeding with it and can debate the case for payment, but was just wanting to get some insight on the EW/CE process which has been helpful. Thank you. ### Related topics [...] Any thoughts from the community on this? That sounds like a CE to me, although I’m maybe a bit surprised you think its 60.1(14). The test here is not whether the CE has happened. You can only reject if the CE ‘has not happened and is not expected to happen’. It could be that this has not happened yet, but it is expected to happen. It seems that both parties agree that there is extra cost - so why not get on with it? You also don’t need to Early Warn this, because per 15.1 EW is not required for things already notified as CE. As for the dayworks element, NEC does not support that approach, so be aware of the pitfalls there. The closest NEC gets to ‘dayworks’ is using PM’s assumptions, and then having other CEs to correct the assumption. Hi Andy, [...] We disagree with this as we feel the PM is negating our time/money (albeit not known yet) to the EW process which is not a vehicle for recovery, the mechanisms to recover are via the CE process. We believe this to be a valid CE with a valid notification with quantum and value to be determined. If we proceed on dayworks when it’s not recognised as a CE, there is a risk we do not get paid. Any thoughts from the community on this?\n\n---\n\nSource: You give EW by notifying as soon as you become… | Ben Walker\nURL: https://www.linkedin.com/posts/walkerben1_nec4-early-warning-5-common-misconceptions-activity-7292574630127517696-niye\nGreat stuff Ben…. In my NEC training I always say don’t ever say ‘early warning’ and ‘compensation event’ in the same sentence… of course, without an early warning 1-may be some disallowed costs coming your way or 2-Compensation events might be assessed at a lesser value! As to your post (with 25+ years of project experiences) 1-chance of the PM sending an early warning = 5% (unless it’s warning about a contra-charge!!) 2-chance of client entering anything in data part one about risks = 5% (same applies to entries in data part two too!) 3-the amount of early warnings I’ve seen “rejected” = far too many to mention !! Everyone - early warnings are a good thing - risk management is a good thing - avoiding and mitigating risks (and the consequences) is a good thing! Nice post Ben ! [...] ⚠️ NEC4 early warning - 5 common misconceptions. ⚠️ ❌Must notify an early warning (EW) before notifying a compensation event (CE).❌ 💡Not true. -You give EW by notifying as soon as you become aware of any matter that ‘could …’. This procedure deals with uncertainty. -If you believe the matter is a CE, then notify a CE. Early warning of a matter for which a CE has previously been notified is not required. -However, it can be helpful to notify any residual uncertainty and take advantage of the collaborative procedure and register. ❌Matters listed in Contract Data part one for inclusion in the Early Warning Register are at the risk of the Client.❌ 💡Incorrect. -The Early Warning Register (EWR) is not a contract document and does not exist prior to Contract Date. The EWR is a management tool. [...] Reply 25 Reactions 26 Reactions Jamie Orme 10mo Report this comment The \"i didnt submit an early warning or compensation event on time because we were waiting for costs\" is one of them grinds my gears \n\n---\n\nSource: Early Warnings In NEC4: Why They Still Come In Too Late\nURL: https://builtintelligence.com/early-warning-nec4/\nWhat an Early Warning is not An early warning is a risk management tool. It flags a matter early so the parties can manage it together. A Compensation Event notification is part of the change management and entitlement process. Raising an early warning does not automatically notify a Compensation Event. Likewise, notifying a Compensation Event does not in itself satisfy the early warning process. However, NEC4 also states that an early warning is not required for a matter for which a Compensation Event has previously been notified. An early warning is not a change to the Scope, does not allocate risk between the parties, and should not be confused with a project risk register. The Early Warning Register [...] 1. Using RFIs or TQs as a substitute for early warnings Requests for Information and Technical Queries are not early warnings. Where a matter raised through an RFI or TQ is becoming urgent or may affect time or cost, a separate early warning should be issued. Solution: Review all live RFIs and TQs regularly. Where any has a potential time or cost implication, raise an early warning without delay. 1. Treating the Early Warning Register as a blame log Where the Early Warning Register is used as a defensive or adversarial tool, the collaborative purpose of the process is lost and the project suffers. Solution: Keep the focus on actions, decisions, and outcomes. The Early Warning Register should answer what needs to happen next, not who is responsible for what has already gone wrong. [...] Where the Project Manager states in the instruction to submit quotations that the Contractor did not give an early warning of a matter that an experienced contractor could have given, the Compensation Event is assessed as if the Contractor had given that early warning. In practice, t\n\n---\n\nSource: ECC Section 15 - Early Warnings - NEC Guidance Note\nURL: https://gmhplanning.co.uk/nec-guidance-notes/nec-ecc-clause-16-early-warnings/\nSkip to content GMH Planning Ltd NEC Training NEC3 NEC4 Contract Consultancy Logo GMH Planning – NEC Training Experts in the New Engineering Contract shopping\\_cart NEC4 Training Training Courses\") NEC4 Public Training NEC Advice Advice and Project Planning Guidance\") NEC Guidance Notes Free Downloads NEC FAQs NEC People Conference NEC4 Webinar Blog Contact NEC Guidance Notes NEC EECC Section 15 Early Warnings NEC Guidance Note # ECC Section 15 – Early Warnings timer 7 Minutes read time tag Early warnings The early warning process is a mechanism for both parties to identify potential problems to the project. The contract emphasises that both Parties are obliged to notify the other as soon as they become aware of a matter that could affect time, cost or quality. [...] It is worth noting that NEC4 has introduced some subtle changes compared to that of NEC3. This simple table shows some of the key changes which is more about terminology change rather than process change: NEC4 NEC3 Section 15 of contract Section 16 of contract Early warning meetings Risk reduction meetings Early Warning Register Risk Register [...] A common question asked associated with managing ECC contracts is “what should be shown on the programme in terms of early warnings”. Previously NEC2 and the first edition of NEC3 stated that as part of a revised programme the Contractor should show “the effects of notified early warning matters”. This was subsequently removed in the NEC3 June 2006 amendments. The reason that this was removed is that many Contractors were showing possible effects of matters that were not certain to happen, and in some cases changing planned Completion accordingly. The result was that planned Completion was moving in and out in time with events and durations that were potential ef\n\n---\n\nSource: How to Raise an Early Warning Under an NEC4 Contract | Metroun Quantity Surveyors\nURL: https://www.linkedin.com/posts/metroun_how-to-raise-an-early-warning-under-an-nec4-activity-7298280350462472193-FgbA\nlikelihood, and on this axis, we've got the consequence. So we'll say that the likelihood of this is quite high and the consequence of this is also very high. So we can see this is a major event. So we'll click create and you can see in the top right hand corner that it's working on creating that early warning for us. The great thing about this software is you don't need to create anything from scratch. It does all automatically for you. So here you can see this is early warning 5. Stone, Peter, When we raised it and who raised it, the status of the early warning. And again, if you look in actions, we can see it's nice and clearly defined here. So we've got the contract title, the contract type. The title of the early warning. The description of the early warning, um. What the risk [...] of the NEC 4 ECC or close 16.1 in NEC 3. OK, so now you know what early warning is. Who can raise an early warning? Both the contractor and client can raise an early warning if they foresee a potential risk that could affect the contract. It's important to remember that early warnings should be raised as soon as the issue is identified. Failure to do so could result in cost implications and disputes later. OK, let's pop onto the metro and contract management software and we can see how to raise an early warning. Raising an early warning follows a structured process under the NEC framework. First of all, we need to identify the issue. Before raising the early warning, we need to consider if the issue is likely to impact the project's cost, time or quality. Next, we need to notify the other [...] Enhancing Operational Resilience: Navigating Emerging Risks and Strengthening Business Continuity thebci.org 7 Like Comment To view or add a comment, sign in Basil Aldagen 📈 + Report this post Co"
}