Time Risk Allowance TRA

NEC was first published in 1993 as the New Engineering Contract. It is a suite of construction contracts intended to promote partnering and collaboration between the contractor and client. The third edition, NEC3 was published in 2005.

The term ‘float’ is used to describe the amount of time that an event or activity can be delayed without delaying the overall completion of the works. Float is calculated by subtracting the time necessary to perform a task from the time available to perform it.

There are a number of types of float identified in NEC contracts:

• Total float: The time an activity can be delayed from its early start date without delaying the planned completion date.
• Terminal float: The difference between a contractor’s planned completion date and the completion date set in the contract.
• Time Risk Allowance (TRA).

TRA is the amount of time allowed by the contractor in programming activities to allow for the risk of delay should problems arise. This might allow for risks such as poor weather and inefficiencies on site that have a reasonable probability of occurring but are not significant enough to merit inclusion in the risk register.

For example, an activity might take 10 days to complete assuming normal circumstances and conditions. However, downtime and poor weather might result in the activity actually taking 12 days to complete.

In this case, the activity may be shown as taking 12 days in the programme, but with 2 days of TRA. This creates a worst case programme. It is common for conservative assessments of an activity’s duration to be made by the contractor who will want to avoid applying unnecessary pressure on themselves.

Alternatively, TRA might be excluded from the activity, but considered as a separate item in relation to its possible impact on the critical path. Or it might be excluded from individual activities, but considered cumulatively in relation to a group of activities.

The assessing and inclusion of TRA within the programme is a requirement of the NEC3 form of contract. Taking account of TRA gives the project manager the reassurance that the risks for each activity have been properly considered, and the project manager may refuse to accept the programme should this not be included. However, TRA is ‘owned’ by the contractor and as is not time that can be ‘used’ by the project manager.

How it is included and illustrated in the programme will vary from project to project but precisely how it is shown is not a reason for non-acceptance by the project manager.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki:

• Articles of agreement.
• Back to back provisions in construction contacts.
• Compensation event.
• Contract conditions.
• Cost reimbursable contract.
• Defects.
• Delay damages.
• Disallowed cost.
• Extension of time.
• Key dates.
• Latham Report.
• Liquidated damages.
• Modifying clauses in standard forms of construction contract.
• NEC3.
• NEC contract change management systems.
• NEC early contractor involvement.
• Period for reply.
• Procurement route.
• Time management of construction projects.
• Variations.

[edit] External references

• Practical Law - Construction blog