The early warning process is meant to be a proactive mechanism for both parties to identify potential problems to the project and try to avoid or minimise their impact before they happen. The contract emphasises that both parties are obliged to notify the other as soon as they become aware of a matter that could affect time, cost or quality. Traditionally it is the Contractor that tends to raise more early warnings, largely because they are the ones doing the work and more likely to identify the issues first. However, the Project Manager should be equally motivated to give early warnings in order to maximise the time available to consider the problem with the Contractor, to increase the likelihood of finding the best solution to meet the Client’s interests in a given situation. The Project Manager could, for example, raise an early warning if they feel the Contractor does not have sufficient resources to meet the programme. Once a matter is notified, these are discussed at an “early warning” meetings, and the matters recorded onto an Early Warning Register. These matters are then subsequently discussed at each Early Warning meeting until they are closed out, with each meeting recording the current action/progress regarding each matter.
The early warning system is a very simple yet very important aspect of the contract. In simple terms, it places a requirement on both parties to notify the other if they become aware of any matter that could affect time, cost or quality. Once formally notified, the parties can review firstly if it is an issue or not, and if it is an issue then how it can be managed in order to avoid or minimise its effect on the project. This process should NOT be considered a commercial tool but recognise it as a proactive management tool.
An early warning should be written constructively and concisely so that it is well received by the other Party which will either then lead to a precise response if the issue is clear, or discussed in an Early Warning meeting. The Early Warning Register will then record the status and action owner of that matter progressively until it is concluded. Only the Project Manager can update the actions on the Early Warning Register.
If a Contractor fails to notify an early warning as soon as they became aware of this event eventually becomes a compensation event the lack of early warning could be taken into account when the Project Manager assesses its impact. This is due to the fact that the Employer has lost the opportunity to be able to mitigate that event had they known earlier. Equally same if Project Manager fails to notify early warnings of potential Employer issues – as Contractor not been able to offer mitigation for those they might have been able to do.