NEC4: Engineering and Construction Contract Option A: Priced Contract with Activity Schedule

Product Information

The supplier selection user guide helps with how to select a supplier. Where tendering has been chosen as the method of selection, guidance is provided on the tender process including sending out invitations to tender, tender evaluation and assessment. Guidance is also provided on finalising and awarding contracts. By providing clear, straightforward language in contracts, and encouraging a collaborative and non-adversarial approach, they’ve played a big role in improving contract standards and project management in construction projects. If you are working on a project that’s underpinned by an NEC4 contract, you’ll need to make significant efforts to manage how you monitor and forecast your project costs to comply with the contract and get paid. Clause 81 has been amended to make the contractor's liabilities more clear, in contrast to the previous wording which assigned "all risk that the employer [now client] does not have" to the contractor. However, this raises the question about whether the client or the contractor will be deemed to carry anything not listed as either a client or contractor liability.

The starting point assumes the client has resolved its contract strategy and decided which contract to use, including the main and secondary options where relevant.Although this contract is often referred to as “Cost Plus,” contractors should not get complacent and think Option E means a blank chequebook for works. The terms within the contract should set out clearly what is and isn’t to be reimbursed to the contractor. A new compensation event is introduced where the PM notifies that a proposed instruction is not accepted. This is intended to deal with ensuring that contractors are paid for the time they spent working on the quotation. However, it seems to be quite a blunt tool which ignores the reason behind the PM requesting the proposed instruction in the first place. The nature of the FC and DRSC mean that the contract preparation and management parts of the guidance are contained in the same user guide. The accepted programme is essential for this option and will need to be regularly updated as works progress. All stakeholders of the construction project should have key input into the programme acceptance. The starting point assumes the client has prepared the relevant NEC4 contract. Managing the contract

Beneficial for developers who are just entering the market as responsibility for procuring and managing the works is with the management contractor.

Establishing procurement and contract strategies

NEC4: A User’s Guide is a fully updated new edition of the essential book for working successfully with the NEC suite of contracts. Comprehensively updated for use with the NEC4 suite of contracts, this remains an indispensable ‘on the top of the desk’ companion for anyone involved in preparing, managing or contributing to an NEC4 contract.

These disadvantages, however, are often outweighed by the benefits they provide in terms of clarity, collaboration, flexibility, and effective project management. Although designed with simpler language compared to other contracts, and with the first changes since the NEC3's introduction in 2005, the NEC4 contains these terms that you must familiarise yourself with. The repair and indemnity provisions at clauses 82 and 82 have been replaced with a new recovery of costs clause 82. The waiver of subrogation has now been extended to cover both parties, following on from the SSE v Hochtief decision where it was held that insurers had the right to pursue a joint insured. Core Clause 9: termination This groundbreaking initiative aimed to stimulate innovation and streamline the project management process, departing from traditional norms. Its objective was to encourage the effective application of project management principles, eliminating any potential hindrances.Risk Management: NEC contracts incorporate comprehensive risk management mechanisms, distributing risks fairly among the project stakeholders. The contracts provide a framework for identifying, assessing, and mitigating risks, ensuring a balanced allocation of responsibilities. This approach promotes a proactive risk management culture and reduces the likelihood of disputes arising from unforeseen events. At the request of the insurance market, "risks" has been changed to "liabilities" throughout which will help to avoid confusion. The timely issuing of notifications is essential to the NEC’s collaborative way of working. Continuous communication between all parties will ensure disputes are kept to a minimum. Collaboration and Cooperation: A distinctive feature of NEC contracts is the emphasis on collaboration and a non-adversarial approach. The contracts promote early involvement of all parties, encouraging cooperation and open communication throughout the project lifecycle. This collaborative environment fosters a proactive problem-solving mindset, leading to more efficient decision-making and improved project outcomes.