The Hidden Cost of No Planning: How Small Contractors Lose Out on NEC Projects

In the high-pressure world of UK construction, particularly within NEC3 and NEC4 contract frameworks, poor planning is not just a technical oversight’s a commercial vulnerability. For small and medium-sized contractors, underestimating the importance of robust project planning can lead to lost tenders, rejected compensation events, cash flow issues, and reputational damage.

This article explores the tangible and hidden costs of inadequate planning, particularly when failing to align with NEC programme requirements. We’ll demonstrate how the right approach-powered by tools like Primavera P6 and guided by NEC-aligned planners-can transform planning from a compliance exercise into a commercial advantage.

1. The NEC Programme: A Legal and Commercial Tool

At the core of NEC3 and NEC4 Engineering and Construction Contracts (ECC) lies the concept of the Accepted Programme-a regularly updated, logically sound project schedule that is contractually binding.

Under Clause 31, contractors are required to submit a programme that includes:

• Order and timing of operations

• Key dates and access constraints

• Resources, float, and time risk allowances

• Links to Early Warnings and Risk Management

Clause 32 mandates that this programme be regularly updated to reflect actual progress, changes, and risks. A missing or non-compliant programme can result in:

• Non-payment for completed work

• Denied compensation events (Clause 63.5)

• Time-barred claims

• Loss of adjudication leverage

🔍 Academic insight: Turner and Simister (2001) argue that contract success is closely linked to the ability of project teams to develop and maintain dynamic, logic-based programmes within collaborative frameworks-exactly what NEC demands.

2. The Domino Effect of Weak Planning

Many SMEs and subcontractors operate with minimal planning functions-often a basic Gantt chart in Excel or a consultant-planner brought in post-award. This reactive model can be fatal in NEC environments, where time is both a legal entitlement and a claimable asset.

Consequences of under-planning:

Type of Cost	Description	Example
Direct Cost	Lost recoverable time and cost	Failure to claim 4-week delay due to lack of logic-linked delay evidence
Opportunity Cost	Missed tenders or frameworks	Client rejection due to no demonstrated planning capability
Reputational Cost	Perceived as unreliable	Tier 1 avoids subcontractors with no P6 schedule or delay narrative
Resource Inefficiency	Misallocated teams and plant	Overlapping trades, idle plant, or rework
Dispute Risk	Weak claims or adjudication losses	Adjudicator rejects time extension due to no Accepted Programme

📚 Love et al. (2016) found that a disconnect between project planning systems and contract obligations is a recurring root cause of project failure in UK infrastructure delivery.

3. Primavera P6 and the Power of Predictive Control

For contractors serious about NEC project planning, Primavera P6 remains the gold standard. While often associated with Tier 1 delivery, it’s increasingly accessible to SMEs via consultancy support or targeted training.

Why P6 matters under NEC contracts:

• Creates logic-driven programmes for Accepted Programme submissions

• Captures resource and cost data for earned value tracking

• Allows Time Risk Allowance (TRA) modelling using float and probabilistic analysis

• Enables forensic delay analysis for Clause 63.5 CE submissions

• Provides an audit trail to defend claims

🛠️ Example: On a recent NEC Option C project, an M&E subcontractor avoided a £150k LAD exposure by using a contemporaneously updated P6 programme to demonstrate mitigation efforts.

4. What Poor Planning Looks Like: Common Pitfalls in NEC Audits

At NEC Planning Solutions, we often get called in mid-project to resolve planning breakdowns. The following deficiencies are common:

Planning Error	NEC Clause Affected	Impact
No float or logic in schedule	31.2(d)	No critical path → Disputed delays
One-off schedule with no updates	32.1	Delay claims void due to staleness
Static, Excel-based schedules	31.2(f)	No risk allowance → No CE justification
Constraints override real logic	31.2(e)	CPM failure → Poor reforecasting
Lack of resource/cost data	31.2(g)	No productivity monitoring

✅ Best practice tip: Integrate monthly Schedule Quality Assurance (SQA) checks using DCMA 14-point metrics or Acumen Fuse. Ensure that the programme reflects reality-not just intent.

5. Planning Drives Commercial Outcomes

One of the least appreciated truths in NEC environments is that planning is a commercial activity. A sound programme:

• Improves cash flow via accurate payment applications

• Strengthens CE submissions by evidencing cause-effect logic

• Protects from LADs and termination risks

• Reduces dispute risk with transparent progress tracking

📚 Aibinu and Jagboro (2002) highlight that projects with structured planning and risk analysis are 40–50% more likely to deliver on time and budget.

6. Building Planning Capacity: In-House or Outsourced?

For many SMEs, the challenge is not awareness-but capability. Hiring a full-time P6 planner is often not feasible. Instead, smart contractors adopt a hybrid model:

• Outsource to specialist consultancies like NEC Planning Solutions for:

  • Tender programme development

  • Baseline creation

  • Monthly updates or CE support

  • NEC programme audits

• Upskill in-house staff through short courses, mentoring, or software training

🎯 CITB (2021) reports that planning remains one of the UK’s most significant construction skills shortages-particularly in NEC, digital tools, and forensic delay analysis.

Final Thoughts: NEC Planning Is Not a Luxury-It’s a Lifeline

For small and medium contractors, the hidden cost of no planning is paid in missed opportunities, weaker claims, and slower growth. Under NEC, the programme is not a “nice-to-have”-it’s a legally binding, commercial tool.

If your organisation lacks internal capacity to create or manage high-quality NEC-compliant programmes, now is the time to act. Partnering with a planning consultancy like NEC Planning Solutions can level the playing field, improve project outcomes, and protect your profit margins.

📩 Need help with an NEC Tender or Project Programme?Contact us at info@necplanningsolutions.co.uk for a free consultation.

References

• Aibinu, A.A., & Jagboro, G.O. (2002). The effects of construction delays on project delivery in Nigerian construction industry. International Journal of Project Management, 20(8), 593–599.

• Love, P.E.D., Simpson, I., & Hill, A. (2016). A retrospective analysis of planning processes in complex projects. Construction Management and Economics, 34(3), 157–171.

• Turner, J.R., & Simister, S.J. (2001). Project contract management and a theory of organisation. International Journal of Project Management, 19(8), 457–464.

CITB (2021). Construction Skills Network: Labour Market Intelligence Report 2021–2025. Construction Industry Training Board.