During NEC4 training, a question about the contract will often lead to a discussion about how the organisation works. Someone understands what a procedure requires, but explains why it will be difficult to follow on their project.
A Project Manager may know a decision is due while waiting for approval from people outside the project team. A Contractor may see a developing problem but hesitate to notify it because they expect an early warning to be treated as a claim.
I remain convinced that NEC4 can help teams manage projects well. Its procedures require attention to issues while there is still an opportunity to influence the outcome. In practice, the organisation’s approval arrangements and established habits can make that difficult even where the people involved understand the contract.
Both sides are worried about the other
I have heard essentially the same concern from clients and contractors in training. Clients say they want to collaborate but worry that the Contractor will take advantage of them. Contractors say they want to collaborate but worry that the Client will take advantage of them. Each sees its caution as a necessary response to the other party.
Both have legitimate commercial interests to protect. Their caution becomes a problem when it prevents them from dealing with an issue that needs their joint attention. An early warning discussion can quickly become an argument about who caused the problem and who will pay, while the opportunity to reduce its effect is passing.
Explaining the distinction between early warning and compensation events helps. Participating in a discussion about a risk does not, by itself, settle responsibility for its financial consequences. A Client may still need to provide information or make a decision about a matter whose underlying risk sits with the Contractor.
If raising a genuine concern early earns someone a reputation for being claims-conscious or difficult, hesitation about the next notice is understandable. I can explain why the warning should be given. The people receiving it also need to consider what their response teaches the other party about raising problems.
Project Manager authority and decisions
A recurring difficulty is the difference between the authority described in the contract and the authority available within the organisation. The Project Manager may be responsible for a decision but have to obtain approval from Legal, Commercial or senior management before making it. The people attending the course may understand the required procedure without being able to change that approval route.
Working through an assessment in the training room establishes what information is needed and how the decision should be approached. It does not establish whether the person returning to work will be permitted to make that decision within the contractual timescale. The organisation needs to settle those arrangements alongside the training.
Where a wrong decision attracts immediate criticism, waiting can feel safer for the person responsible, even if the delay makes matters worse for the project. Reminding that person of the response period does not resolve their concern about what will happen if their judgement is challenged.
An assessment requiring a forecast involves making a judgement while the outcome remains uncertain. Waiting for the actual outcome postpones the decision the procedure was intended to produce. Training can help someone prepare and explain a forecast. Management needs to support a properly reasoned assessment without expecting the person making it to know the future.
Experience under other contracts
Experienced people bring established ways of working to an NEC4 course. Practices that have served them well under other contracts may need to be reconsidered because NEC4 gives the information or decision a different function.
Discussions with experienced planners about a baseline can reveal assumptions about its contractual status that need to be examined under the particular NEC contract. Changing the terminology does not, by itself, change how the programme is managed. The planner and the people administering the contract need a common understanding of how the Accepted Programme is used.
Compensation events are sometimes left until the end because people are more comfortable valuing what has happened than assessing its effects as the work proceeds. A team can understand the procedure and still revert to familiar habits when the first difficult assessment arrives.
NEC4 administration and internal requirements
NEC4 is often described to me as administratively demanding. Before accepting that explanation, I want to understand what the organisation has actually required. A procedure in the published contract needs to be distinguished from a report or approval added to meet an internal preference.
One recurring problem is the use of an organisation-wide amended form developed around its largest or most complex projects. A smaller project inherits reporting and approval requirements which may be disproportionate to the work. The team experiences the resulting burden as part of administering NEC, even where the organisation has created it.
Some additional requirements are justified. The people preparing them should still be able to explain who will use the information and what action it supports. If a programme update, cost forecast and internal report all reproduce the same information, the team has to prepare them and somebody has to review them. The organisation should establish what the additional reporting contributes before requiring it.
Excessive requirements can also weaken respect for the procedures that matter. Once people routinely bypass requirements they regard as impractical, it becomes harder to maintain a shared understanding of what must be followed. Training on the standard form needs to be accompanied by a review of the actual contract and the organisation's own arrangements.
Early warning targets and unresolved issues
One example involved a Project Manager incentivised to clear early warnings from the register quickly. The warnings were simply deleted. The reported position improved without demonstrating that the underlying issues had been resolved.
The number of open entries could fall without any improvement in how the risks were managed. Explaining the register procedure again would have left the incentive untouched. The organisation needed to examine whether the measure actually told it what it wanted to know.
A project can also put considerable effort into reporting a deteriorating position while leaving the decisions needed to improve it outstanding. A dashboard may accurately describe a delay, but somebody still has to obtain the missing information or decide how the remaining work will be carried out.
The Early Warning Register should help the team establish what action has been agreed and whether it has worked. A changed status at the next meeting is useful only if it reflects what has happened and identifies any work still outstanding.
What happens after the course
People need to understand the contract they are administering, including their responsibilities and the effects of any amendments. The organisation commissioning training also needs to consider how that knowledge will be used. Checking that the course has covered the right clauses is only part of that work.
I prefer initial training to be followed by workshops during the early stages of a project. The team can bring an actual submission or assessment and work through the decisions it requires. The exercise can show whether a delayed response results from a misunderstanding of the contract, missing information or an approval route that needs to change.
Those operational workshops need to involve the people preparing and reviewing the work, with access to someone who can resolve organisational obstacles. Without that authority, the group may be able to explain why a procedure is failing but remain unable to change it.
Teaching has made me more cautious about treating every problem as a training need. Further explanation is worthwhile where someone does not understand the procedure. Where the obstacle is a delegation, an incentive or an internal rule, somebody with authority has to address it. The people who attended the course cannot be expected to solve that simply by understanding NEC4 better.
