The ‘New Engineering Contract’ (NEC) form of contract launched in 1993 and was a revelation in the construction contracting world, using plain language and built-in processes to stimulate good project management. A key NEC contractual tool is the Early Warning Notice (EWN) procedure which facilitates collaborative risk management between the contractor and the employer’s project management (PM) team using proactive mitigation rather than a reactive damage limitation philosophy.
Whilst the EWN procedure has been welcomed by the construction sector and is a positive step forward, its use on large, complex infrastructure programmes can lead to problems of creating an administrative burden due to notices being required for a broad range of ‘matters’. This is compounded by contractual sanctions for failure to use the EWN procedure which can result in the intent of the procedure being transformed from risk management to commercial protection. These issues can lead to negative behaviours which tarnish the collaborative ethos of the contract and the EWN procedure. This dissertation uses research data from the Crossrail programme, which uses the NEC3 contracts, to provide recommendations to industry for improving the EWN procedure and contractual provisions.
The literature review identified a number of themes associated with the problems encountered when applying the EWN procedure on construction contracts. However these reported problems were based on qualitative rather quantitative data.
The research used primary and secondary data from the Crossrail programme to obtain a greater understanding of the problem and provide recommendations through interviews of practitioners with many years experience of managing the EWN procedure. The findings of the research demonstrate that there is a link between a project’s anticipated final cost (AFC) and the quantity of EWNs. Projects above £100m have more that 1 EWN submitted per day.
The research also identified that on average 82% of EWNs are submitted by the Contractor team. The research provides practical ways to improve the management of EWNs via a simple structure template and also provides alternative contractual provisions to reduce the negative effects of the standard punitive sanction clauses.