In this series titled “NEC3 questions”, Steven Evans addresses the most common questions asked about the NEC3 contract.
“Who owns the float?”
Generally, there are 3 types of float:
- Project float (total float);
- Time-risk allowance (free float); and
- Period between planned completion and the completion date (terminal float).
As a general principle, NEC3 deals with each as follows:
- Total float – available either to the Employer or the Contractor (on a first come first served basis) to mitigate delays caused by compensation events or slow progress, i.e. its is ‘owned’ by the project;
- Free float – this is the duration allowed in each activity by the Contractor to account for the risk in not completing that activity in the minimum possible period. It is ‘owned’ by the Contractor and cannot be used to mitigate the effect of a compensation event;
- Terminal float – the duration between planned completion and the current contract Completion Date. This is also ‘owned’ by the Contractor and cannot be used to mitigate the effect of a compensation event.
It is important to remember that all the above must be shown on the Contractor’s programme and a failure to show it is a reason for the Project Manager to refuse to accept it.
For more information, please contact us.