NEC4 Engineering and Construction Contract

Changes to NEC4 recommended by NEC People forum

From our NEC People conference output in 2015 we gave a 23 point list of changes that as a group we wanted to see in NEC4. Of that list there were three items I was not precious about (but it was not just my list!) so for me there was a core of 20 items.

We know that list was considered in full by the authors of the contract and having just completed my thorough review of NEC4 ECC, I can confirm that over half of those points (11 out of 20) have specifically been incorporated into the NEC4 contract wording. I think we should be proud as a group that we have been able to influence this future generation of the contract.

Of the remaining 9 points not addressed, I would categorise these into 3 must haves and 6 nice to haves. These are:

Must haves (that should have been addressed and still need considering)

  • Assessing compensation events against the accepted programme (see my “Elephant in the room” article)
  • Key Dates, which attract undefined cost if missed can be instructed to be brought forward (accelerated) and then assessed by PM as a compensation event if they don’t agree with Contractor quote. Completion Date or Sectional Completion Dates cannot be instructed/assessed self via acceleration so why should Key Dates be?
  • Still no option for sectional Defect Dates – where large chunks of work are being handed over several months/years before Completion Date and liability for defects in those sections is still the Defect Date after ALL works are complete.

Nice to haves – would have been good to see and Clients may wish to consider as a Z clause

  • Requirement to have a programme review meeting to discuss the submission and speed up the understanding/response as to whether accepted or not
  • Opportunities focused upon in the same way as “risks” in the early warning process (or a parallel process)
  • Requirement for a regular commercial compensation event meeting (like the regular early warning meeting interval) to discuss each compensation event and look to move it forward in the notification / quotation / assessment / implementation process
  • Contract Data part 2 to introduce “Contractors Representative” who will be the authorized person to act as Contractor within the contract. Equally add mechanism for that person to be able to delegate actions.
  • allow an electronic contract administration tool that is mandated to be used identified into contract data part 1
  • Requirement to submit with programme “for each operation a statement of principal equipment and resources” changed – I rarely see this and think there is better wording to have to accompany a programme (more of a narrative explaining key differences from last submission)

Elements that have been changed in NEC4 from our suggestions:

  • Change of Risk Register to Early Warning Register and requirement for an early warning meeting interval to encourage regular meetings (clause 15)
  • Requirements for more specific reasons for rejection (clause 13.4)
  • Deemed acceptance of the programme if PM fails to respond and then fails to respond to a reminder (clause 13.3)
  • Clarification that non-implemented compensation event should be shown on programme, not just implemented ones (clause 32.1)
  • Clearer how proposed quotations should operate and then follow through to implementation (clause 65)
  • Value engineering clause added for option A and B so Contractor can benefit from suggested savings (clause 16.1and 63.12)
  • Obligation for PM to confirm on same piece of paper that something is a compensation event and request a quotation (clause 61.1)
  • Professional Services Subcontract added to family of contracts
  • Option A inclusion of People Rates in contract data part 2 to remove subjective elements of schedule of cost components
  • Definition of Working Area’s to account/clarify for remote working outside the working area (SCC 11)
  • Removal of subcontractor fee percentage

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