NEC4 COMMUNICATIONS
What is communication? It is difficult to be precise with a definition as it is a broad subject, but the following is suggested:
“Communication is the process of conveying information to give a particular message to those who receive it”.
The message that is received through communication is dependent upon numerous factors, including:
- The type of communication.
- How the communication is delivered.
- Background circumstances.
- Motivation of the communicator.
- Purpose of the communication.
To be effective, any communication needs to be clearly understood by the intended recipients. The quality and clarity of a communication may be improved with knowledge and understanding of the intended recipients. Although contracts usually require communications to be formal, the basic principles of communication continue to apply.
Communications form an essential part of all NEC4 contracts.
Contracts often prescribe certain requirements for communications, including:
- The type of communication.
- How a communication is delivered.
- The purpose of a communication.
Any such prescribed requirements should not constrain the communication process between the parties and named roles of a contract. To ensure a collaborative approach, it is advised to discuss matters informally before recording and communicating information formally, as the contract requires.
Communications form an essential part of all NEC4 contracts and although it is not a defined term an NEC4 communication could be described as:
“The transfer of written information to initiate or give effect to a contract requirement, process or procedure”.
There are many different types of communication within NEC4 contracts, each serving a particular purpose, with the contract describing the type of communication required. All the NEC contracts generally contain the following provision at clause 13.1:
“Each communication which the contract (or subcontract) requires is communicated in a form which can be read, copied and recorded”.
The NEC4 contracts state the party, or named role, who is responsible for either initiating a communication or responding to a communication.
An important term here, which is often overlooked, is;
‘... which the contract (or subcontract) requires’.
The word ‘requires’ is not defined and could be interpreted strictly as a reference to a ‘precise obligation’ or could be a general reference to ‘any’ communication given in relation to a contract process or procedure. What is clear, however, is that a communication must be given in a form which can be:
‘... read, copied and recorded’.
This suggests that the communication should be in writing, especially as the contracts do not contain any provision for verbal communications. Finally, the written text in a communication is required to be in the:
‘language of the contract.’
This is an identified term and described in the contract (or subcontract) data.
The NEC4 contracts state the party, or named role, who is responsible for either initiating a communication or responding to a communication. The party, along with any named roles, are identified in contract (or subcontract) data, although the NEC contracts provide for notifying the following changes:
A formal appointment
Client’s agent: TSSC and FMSC.
Delegation of actions
Project manager: ECC.
Supervisor: ECC.
Contractor: ECS, PSS, TSS.
Client: ECSC, PSSC, TSSC, FMSC.
Service manager: PSC, TSC, FMC, DBOC.
Service provider: FMS.
Supply manager: SC.
Purchaser: SC.
Replacement
Project manager: ECC.
Supervisor: ECC.
Service manager: PSC, TSC, FMC, DBOC.
Client’s agent: TSSC, FMSC.
Supply manager: SC.
Senior representative: ECC, ECS, PSC, PSS, TSC, TSS, FMC, FMS, DBOC.
Alliance board representative: ALC.
In addition, if a partner is providing the alliance manager and the partner’s obligations under the ALC contract are terminated, then the client appoints a replacement alliance manager.
Be aware of any such notifications, to confirm the authority of a person that is either sending a communication under the contract or that you are sending a communication to.
A communication has effect when it is received by the required recipient at either the address stated in contract (or subcontract) data, or a subsequent notification.
The contract usually states who the recipient of a communication is. A communication has effect when it is received by the required recipient at either the address stated in contract (or subcontract) data, or a subsequent notification.
A provision introduced in NEC4 long form contracts is where the scope may specify the use of an (online) communication system. Where this is the case, a communication has effect when it is communicated through the specified system. To be most effective a communication system should be considered across the supply chain, where appropriate.
Ensure that any specified communication system replicates the procedures and timescales within your particular contract including scope procedures and ‘z-clause’ amendments. Consider the delegated authority structure within a specified communication system to ensure governance compliance for certain types of communication, especially those that relate to financial authority.
An instruction is essentially a directive or order and is given by the party or named role stated in the contract. An instruction usually requires some form of action to be taken by the recipient, either to do something or stop doing something. Under NEC4 contracts an instruction may be given for reasons specified in the contract, including the following:
- Change to the scope (subcontract scope).
- Change to a key date.
- Attend an early warning meeting.
- How a prevention event is dealt with.
- Removal of a person.
- Submission of a particular document.
- To stop work.
- To search for a defect.
- Correcting a mistake in a document.
NEC contracts expressly require an instruction, given in accordance with the contract, to be obeyed by the recipient, but check to ensure that a person giving an instruction has authority, which may have been delegated. A limitation on what may be instructed is determined by either the contract itself or the law of the contract. An example could be where part of the scope of work is instructed to be omitted and subsequently given to another supplier. The authority for such an instruction may be provided for within the contract, otherwise the law of the contract would determine the extent to which such an instruction may be given.
A notification is particularly required where the information being communicated has contractual importance or significance and is essentially bringing a matter to the recipient’s attention. All the long form NEC4 contracts require notifications to be communicated separately from other communications, with the NEC user guides stating that this is to avoid important things being overlooked.
A notification commences several important procedures under the NEC4 contracts, including:
- Early warning.
- Defects.
- Finalisation of defined cost.
- Compensation event.
- Termination.
- Resolving disputes.
Certain notifications act as a ‘condition precedent’, in that a notification must be given before an action can be taken or a right accrues, including the following:
- Delegating actions.
- Replacing a named role.
- Reminder of a failure to respond to a submitted programme (or plan).
- Supplier compensation event notification.
- Reminder of a failure within the compensation event procedure.
- Termination right for specified defaults.
- Intention to pay less than the notified sum.
Although notifications are required to be communicated separately, in certain instances a notification is required to include other types of communication, including as follows:
- Acceptance – programme.
- Acceptance – acceleration quotation.
- Instruction – submit quotations for a compensation event.
- Acceptance – compensation event quotation.
- Acceptance – climate change plan.
NEC contracts use the term ‘acceptance’ in contrast with other forms of contract that use the term ‘approval’, with acceptance essentially meaning ‘no objection’. Note that giving an acceptance does not change the contractual responsibility or any liability for design.
An additional requirement, introduced with NEC4, is that the reason for not accepting a submission is to be given in sufficient detail to enable the matter to be corrected.
Certain procedures contain a hold point, whereby a m after cannot be reasonably progressed until acceptance has been given, including the following;
- Proposal to change the scope.
- Replacement key person.
- Proposed subcontractor.
- Particulars of design.
The NEC long form contracts all require a response to be given for a communication submitted for acceptance, which is either to accept or not accept. The contracts do not provide for a response of ‘qualified acceptance’. The reasons for withholding acceptance are generally stated within a procedure although an additional, general reason is given in that more information is needed to assess the submission fully. When an acceptance is withheld for a reason not stated in the contract then this is a compensation event. An additional requirement, introduced with NEC4, is that the reason for not accepting a submission is to be given in sufficient detail to enable the matter to be corrected.
A certificate provides a record of what has been assessed, or determined, and is essentially a position statement. NEC4 contracts require the following matters to be certified:
- Completion (including delivery and works completion).
- Take over.
- Defects record.
- Payment.
- Final amount due.
- Termination.
As is the case with notifications, the long-form NEC4 contracts require certificates to be communicated separately from other communications. Unlike other communications, the applicable clause does not provide for who the certificate is issued to, which is stated at clause 13.6 of the long form NEC4 contracts.
There are several other types of communication stated in NEC4 contracts.
A certificate which is commonly used with making payment for equipment, plant and materials off-site is a vesting certificate, although this certificate is not a standard NEC4 requirement.
There are several other types of communication stated in NEC4 contracts in addition to; instructions, notifications, acceptances and certificates. These include the following:
- Inform – tests and inspections. • Issue – early warning register.
- Propose – adding an area to the working (or service) areas.
- Provide – quality policy statement.
- Request – further records for a defined cost assessment.
Where any of these types of communication are required by the contract then they must adhere to the communication compliance principles. Sometimes, it may be difficult to determine whether a communication is actually needed, based upon the description of what is required to be done. To assist with a decision, consider whether a contract requirement relates to a communication or an action. When using a specified communications system, these separate out the type of NEC4 communication to be given, usually supplemented with a general communication type.
Other communications may also be those that are not required by the contract, for example the upcoming leave dates for a key project team member or the minutes from a progress meeting. Although these may not be required to adhere to the NEC4 compliance principles, it would not be practical to adopt a secondary communication protocol. If a communication would not have been sent but for the existence of a project, then it is sensible to communicate this in the same way as required communications.
Where a communication is required to be given, NEC4 contracts usually state a specific timescale for when it is required to be given by. The periods of time are stated in weeks, although noting the exceptions within the W and Y option clauses, for particular reasons. A stated period of time is preceded by the word ‘within’, which effectively means that it is the maximum period of time to send a communication. The period of time commences on the day after the applicable trigger point, that links with the requirement to give a communication, which may be:
- A submitted communication requires a response.
- The occurrence of a specific event.
- A specified point in time.
Contract (or subcontract) data, states periods of time for certain actions, such as payment of a certified amount. The time to reply to a communication may be extended, although only by agreement and before the reply is due. Before agreeing to an extension, however, it is important to consider any possible time effects, as the associated compensation event would not apply until any extended period of time has passed.
The time for responding to a communication may not actually be specified or, alternatively, may be stated as within the period for reply, which is an identified term in contract (or subcontract) data. In both instances a response is required to be given within the period for reply, which may also state exceptions, that is different timescales for specified responses. Conclusion Communications are a fundamentally important part of all NEC4 contracts, with successful contract administration dependent upon the parties dealing with such matters in both an accurate and compliant manner.