MDA Law
Difference between ‘float’ and ‘time risk allowance’ under the NEC3
The NEC3 deals with the programme under clause 31 and states clearly what the contractor is expected to show on a programme which he submits for acceptance. Under clause 31.2 of the standard NEC3 contract, the terms “float” and “time risk allowance” are stipulated and we will be looking at the meaning and difference between these two terms.
Scholars on the NEC3 explains that “time risk allowance” (also known as “free float”) are for periods (events) which are for the contractor’s risk and which further have a great chance of occurring. Free float is thus owned by the contractor and cannot be used by the employer to mitigate the effect of a compensation event.
On the other hand, “float” records a period additional to what is required within the ordinary programme. Under usual conditions, it will record additional time on a programme to accommodate an impact of a compensation event in order to reduce planned completion and or to avoid delays thereto. This “float” is available for the project so the speak, and either the employer or the contractor, can use it in an endeavor to mitigate a delay caused by a compensation event and or other event having a negative influence on the programme.
Author: Barry Herholdt, Senior Associate
