1. Background
The element of time is a central, essential and sometimes critical factor in a construction project.
The agreed end date is daymulched and other, daymulched deadlines may be agreed.
The builder will normally need to take over the contract subject at the agreed time. A school building should be ready for use at the start of school, apartments should be taken over by consumers who have sold previous homes themselves, tenants have terminated previous leases in confidence that the building will be ready on time, etc.
The contractor will have tied up large resources in the form of mobilized crews, costs for rigging and other operations are incurred and agreements have been signed with subcontractors/contract assistants who will have a certain remuneration to be available to the contractor during the agreed construction period.
These are some of the moments that explain why the time element is often a critical factor.
2. Overview of the rules
3. Progress plan as a management tool
Everyone involved in a building or construction project needs to know what is going to happen, when the individual activities should start and when they should be finished.
One needs knowledge about dependencies.
This applies not only to the builder and the total/general contractor, but also to others involved such as the contract assistants of the total/ general contractor.
The builder, in turn, needs to keep control of the overall works.
In this work, the builder may need to rely on people with different professional backgrounds. An updated progress plan will make it easier to prepare this work for the builder.
Typically, the billing plan is also based on a unified progress plan. Contractor, of course, is entitled to payment as values are added and built into the contract object. If the works follow a progress schedule, the billing plan will indicate the amounts for which the contractor is entitled at any time to claim installments.
A realistic and operational progress plan thus becomes a multi-purpose management tool.
4. Details on NS 8407 item 21
Much is similar between the various standards in terms of progress plans.
Since NS 8407 is the standard used most often, we start from this.
Very much of what we write is nevertheless valid for the provisions of NS 8405 paragraph 18, and NS 8406 paragraph 17.
NS 8407 paragraph 21 consists of four sub-provisions, namely:
Paragraph 21.1 “Deadlines for the progress”
Paragraph 21.2 “General Contractor's Progress Plan”
Paragraph 21.3 “Progress status and alert”
Paragraph 21.4 “Coordination obligation of the general contractor”
NS 8407 paragraph 21.2 contains the central provision on progress plans.
It follows from this that the general contractor shall “prepare and present a progress plan” for the builder no later than four weeks after the conclusion of the contract, unless otherwise agreed.
5. What should the progress plan contain?
First, there is a condition that the plan should stay within the scope of the contract.
This means, among other things, all work must be planned within the agreed time frames, including deadlines covered by daylight.
In addition, all significant activities necessary to produce the agreed subject of the contract must be included.
What lies in this can be found in more detail in paragraph 21.2, second paragraph, where it is stated that the plan shall “show all main activities” and then there are mentioned a number of examples of what should be included in the progress plan.
From NS 8407, paragraph 21.2, first paragraph, it is also stated that the builder's benefits must be stated if these are benefits on which the general contractor depends.
In the first paragraph, it is specified that the plan must be specified in such a way as to enable the builder to control the progress of the general contractor.
This has significance in several relationships, and we refer to what we wrote in paragraph 3.
6. Progress status and notification
It follows from NS 8407 paragraph 21.3 that the general contractor shall inform the builder of the actual progress status in conjunction with the progress plan, and this shall be done every four weeks.
Such reporting can be more or less demanding depending on the size of the project, complexity, number of contract assistants, etc.
Even if the general contractor is behind schedule on some activities, the general contractor may be ahead on others. Often you draw a front of progress to show how you stand.
This propulsion front can then be used as a starting point for a sectional survey.
The builder's construction management apparatus will normally also draw up a progress front on its copy of the progress plan, and it is natural to coordinate the status of the parties in between.
As you know, it is the responsibility of the construction managers to check the progress status, and it is the construction managers who normally check the general contractor's installment invoices against actual progress. No builder wants to be (all too) fortung in their payment.
If the project progresses in such a way that there is too great a discrepancy between actual and planned progress, it may come to a point where the progress plan should or must be adjusted. In this case, the builder may require this to be done, cf. NS 8407 paragraph 21.3, last paragraph.
The importance of having a proper progress plan that is operational and to be relied upon cannot be underestimated.
This basically applies to all parties, but the problem is often that the contractor opts out if the delays are so great that he is able to hand over later than the agreed deadline.
However, this should not prevent an overview. In the final phase, normal facilities should be tested and such tests can be time-consuming. No one benefits from rushing into this phase of a project, but this requires good and open dialogue between the parties.
The builder is not served by the fact that the contractor hastens, on the contrary.
7. Revision of the progress plan does not in itself mean that daymulched deadlines are shifted
NS 8407 paragraph 21.3, last paragraph, and NS 8405 paragraph 18.2, last paragraph, state that changes to progress plans do not in themselves mean that the Parties thereby seek to shift the time-limits laid down by day.
If the general contractor considers that he is entitled to an extension of the deadline, such claim must be notified in accordance with the rules of NS 8407 paragraph VII on Amendments etc., cf. NS 8407 paragraph 21.2, second paragraph.
The corresponding rule applies in execution centers, cf. NS 8405 paragraph 18.2, second paragraph.
In other words, a revision of the progress plan where the end date is shifted does not have the consequence that the contractor releases the day mulch.
If the contractor is to have the daycovered deadline postponed, this must be justified by circumstances that can be traced back to the risk area of the builder, and where the warning rules in NS 8407 cpt VII have been properly applied.
This is specified to avoid the contractor misunderstanding the importance of updating the progress plan to match the actual progress.
8. Relationship between progress plan and billing schedule
We find the provisions on the billing schedule in NS 8407 paragraph 27.2.1.
The third paragraph of the provision states that the general contractor shall first “draw up a production plan” This will again be the starting point of the progress plan.
The production plan should be so detailed that it is possible to see a correlation between the production planned and the size of the individual installments.
The amounts of the instalments are based on the planned progress and the number of moments to be included.
These moments are explained quite extensively in NS 8407 paragraph 27.2.1, third and fourth paragraphs.
Reference is also made to NS 8407 paragraph 27.2.1, fifth paragraph, where it is stated that both parties may require an adjustment of the billing plan if there are deviations from the assumptions on which it is based.
At the same time, it must be clarified that even if the general contractor is given the right to demand an adjustment of the billing schedule, this does not apply in the case of forfeiture unless this is agreed with the builder.
For the record, it is mentioned that neither NS 8405 nor NS 8406 provide for a billing schedule.
