The Subcontractors Blueprint

NEC4 Programme Pitfalls: Understand the Requirements & Ensure Your Program is Accepted

Listen Later

In episode 120 of The Subcontractors Blueprint podcast, host Jacob Austin continues the NEC contracts mini-series, providing construction business owners with a comprehensive guide to  program clauses under NEC4 subcontracts. He explains the critical requirements for program submission, acceptance, and ongoing updates, highlighting their impact on cash flow, entitlement protection, and project management. Jacob discusses practical strategies for ensuring compliance, avoiding payment penalties, and maintaining control over compensation events. This episode is essential listening for subcontractors seeking to strengthen their NEC4 contract administration and safeguard their business interests.

KEY TAKEAWAYS:

  • The critical role of the program in NEC4 subcontracts, detailing how it underpins project planning, change management, and subcontractor protection.
  • NEC4 requires programs to include key dates, milestones, logical sequencing, float, time risk allowances, and necessary inputs from other parties.
  • The distinction between planned completion and contract completion dates is emphasised, with terminal float serving as a buffer for subcontractors.
  • Submitting a compliant program on time is essential, as failure to do so allows the contractor to withhold 25% of payments until an acceptable program is provided.
  • Program acceptance and rejection are governed by strict contractual criteria, and deemed acceptance occurs if the contractor fails to respond within set timeframes.
  • Regular program updates are required to reflect progress, changes, and delays, ensuring the program remains a reliable management tool and protects subcontractor entitlements.

    • BEST MOMENTS:

    “A well-managed program, and an accepted program, is absolutely central to administering the subcontract. It sets out how and when the work will be done.”

    “If there’s no current accepted program, the assessment of compensation events may be taken out of your hands—potentially leading to smaller time and cost compensation.”

    “By including key dates and requirements in your program, you are creating hooks within your program that the contractor or whoever else is going to snag on if they miss those dates.”

    “Acceptance of a program doesn’t stop you from having to achieve any of your obligations, and it doesn’t transfer any risk of those to the contractor.”

    “The goal here is to create a program that’s got clear and common reference points for both parties- it allows the contractor to verify the feasibility of your program and to see your needs and your constraints.”

     

    Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

    HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to over £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

    LinkedIn - www.linkedin.com/in/jacob-austin/

    Instagram - www.instagram.com/qs.zone/

    www.qs.zone/all-links

    ...more
    View all episodesView all episodes
    Download on the App Store
    The Subcontractors BlueprintBy Jacob Austin