Introduction

This NEC4 PSC overview is intended to be a quick reference guide as to where a particular subject matter can be found within the NEC4 Professional Service Contract (PSC). This guide focuses on the most commonly used and relevant day to day clauses likely to be most relevant. For a specific project, any bespoke clause amendments introduced by a Client would have to be taken into account. Sections 1-8 are the core clauses for every PSC option A/C/E contract followed by option specific clause details.

NEC4 PSC Section 1 – General

Actions

10.1 Reminder that all Parties are to act as stated in the contract.

10.2 Obligation to also act in a spirit of mutual trust and cooperation.

11.2 List of defined terms (in alphabetical order).

Communications

13.1 All communications in a form that can be read, copied and recorded.

13.2 Communications are only valid if submitted by the system stated in Scope.

13.3 Responses within period for reply or as stated in contract.

13.5 Service Manger may extend period for reply by agreement.

13.7 Any notification has to be separate from any other communication.

Service Manger (SM)

14.1 Service Manger acceptance does not transfer liability from Contactor.

14.2 Service Manger must formally delegate actions in writing.

14.3 Service Manger can issue instructions to change the Scope.

Early Warnings

15.1 Reasons for which an early warning should be notified.

15.2 Either party can instruct the other to an early warning meeting.

15.3 Actions expected of all parties at an early warning meeting.

15.4 Updating of the Early Warning Register by the Service Manger.

Requirements for Instructions

16.1 Notifying and resolving of an ambiguity between contract documents.

16.2 Notifying and resolving of an illegal or impossible requirement.

NEC4 PSC Section 2 – Consultant’s Responsibilities

Providing the Works

20.1 Consultant obligation to Provide the Works in accordance with Scope.

20.3 Consultant not liable for defect providing used expected skill and care.

People

21.1 Consultant to provide key person(s) stated in CD2 or suitable replacement.

21.2 Service Manger can instruct Consultant to remove any person.

Working with Client and Others

22.1 Requirement for Consultant to work with Others as instructed/in Scope.

22.3 Liable costs if Consultant fails to achieve Key Date in CD1.

Subcontracting

23.2 Requirement to submit proposed Subcontractor for acceptance by SM.

23.2 Reasons under which SM could not accept a Subcontractor.

23.3 Also have to submit contract terms for Subcontractor for acceptance.

Other responsibilities

24.2 Consultant obeys instructions given in accordance with contract by SM.

24.3 Consultant acts in accordance with Health & Safety as stated in Scope.

26.1 Disclosure – Consultant may only publicise works with Client’s agreement.

NEC4 PSC Section 3 – Programme

Starting Date / Completion Date

30.1 Consultant does not start work on site until the first access date.

30.2 Service Manger certifies date of Completion.

The Programme

31.1 Requirement for Consultant to submit first programme for acceptance.

31.2 Detailed list of what is required to be shown on programme for acceptance.

31.3 Reasons for SM not to accept an programme (otherwise should accept).

Revising the Programme

32.1 List of what should be shown on a revised programme.

32.2 Intervals for programme submissions to Service Manger.

Acceleration

35.1 Either party can propose acceleration which SM can then instruct quote.

35.2 Consultant issues acceleration quote which SM accepts/does not accept.

NEC4 PSC Section 4 – Quality Management

Quality Management System

40.1 Consultant operates a quality management system in line with Scope.

40.2 Quality policy statement and plan issued for Service Manger acceptance.

Correcting Defects

41.1 Until defect date either party notifies other when become aware of a defect.

41.2 Requirement to correct defect within a time that minimises impact to Others.

41.2 If defect not corrected SM assesses cost to Client of Others correcting it.

Accepting Defects

42.1 Can propose for defect to not be corrected and Scope changed accordingly.

42.2 Consultant to submit resultant quotation saving to SM to accept/not accept.

NEC4 PSC Section 5 – Payment

Assessing the Amount Due

50.1 Service Manger to assess the amount due at each assessment date.

50.2 Definition of the amount due for each application.

50.4 If Consultant not submit application on time SM will assess at zero.

50.5 25% PWDD can be withheld if no 1st accepted programme.

Payment

51.1 Service Manger to certify payment within 1week of assessment date.

51.2 Confirmation of period within which payment should be made.

51.3 Interest recoverable on items corrected on a later certificate.

51.4 Interest recoverable on late payments.

Defined Cost

52.1 Any Consultants costs not identified in Defined Cost are in the Fee.

53 Final Assessment – section on how/when final assessment is made at end.

NEC4 PSC Section 6 – Compensation Events

Compensation Events

60.1 List of what events would be valid compensation events (16 reasons).

Notification

61.1 SM can notify compensation event at time of issuing instruction.

61.2 SM instructs Consultant to produce quotation (and proceed in meantime).

61.3 Consultant can notify a CE and can be time barred after a period if late.

61.4 SM to accept or not accept if Consultant has notified a CE.

61.4 Deemed acceptance if the SM does not respond to reminder.

61.5 SM can advise that an early warning could have been given which wasn’t.

61.6 SM can state assumptions for Consultant to base the quote upon.

61.7 No compensation events can be issued after Completion.

Quotations

62.1 SM can request alternative quotations for dealing with a CE.

62.2 Consultant to provide a quote and alterations to programme (if relevant).

62.3 Consultant to provide quote within 3 weeks, SM response within 2 weeks.

62.4 Service Manger can instruct a revised quote (after explaining why).

62.5 Service Manger can extend period for Consultant to produce quote.

62.6 Consultant’s quote deemed accepted if no response to reminder.

Assessment

63.1 Basis of quotes in relation to if should be actual or forecast defined cost.

63.4 Only reasons stated for which Prices can be reduced.

63.5 Definition of reasons for contractual movement in Completion Date.

63.7 SM may assess as though early warning had been given if it wasn’t.

63.8 Rules for allocation of risk within a compensation event quotation.

63.9 Requires Consultant to act promptly and competently to a CE.

63.10 How ambiguities will be assessed in terms of a compensation event.

Service Manger’s Assessments

64.1 Reasons under which SM can make own assessment of a CE.

64.3 SM to notify Consultant of their own assessment of a CE.

64.4 Deemed acceptance if SM no response to a notification of no assessment.

Proposed Instructions

65.1 Service Manager can instruct a quotation for proposed instruction.

65.2 Consultant submits quotation within 3 weeks and SM to respond.

65.3 If quotation not accepted SM can still instruct (and then assessed as CE).

Implementation

66.1 Implemented when CE accepted/assessed/deemed accepted.

66.2 Prices/Completion Date changed accordingly following agreement.

66.3 Compensation event quote is not changed if later found to be wrong.

NEC4 PSC Section 7 – Title

70.1 Client has right to use material provided by Consultant as stated in Scope.

70.2 Consultant right to use material provided by Client to Provide the Service.

NEC4 PSC Section 8 – Risks and Insurance

80.1 List of Client’s liabilities.

81.1 List of Consultant’s liabilities

83 Insurance cover details

84 Insurance policies and who needs to provide what to whom.

87 Consultant’s liabilities limited to that stated in CD1 except excluded matters.

NEC4 PSC Section 9 – Termination

91.1 List of valid reasons for termination.

92 Procedures to follow upon termination.

NEC4 PSC Additional Option A clauses

11.2 Option A specific identified and defined terms.

20.4 Consultant provides forecast of total expenses at contract intervals.

31.4 Requirement for activity schedule to relate to items on programme.

52.2 Consultant keeps records of expenses and makes available for inspection.

55.1 Clarifies that Activity Schedule is not Scope.

55.3 Consultant may submit revised Activity schedule for acceptance.

55.4 Reasons SM has for not accepting a revised Activity Schedule.

63.13 Ascertaining a new People Rate where required.

NEC4 PSC Additional Option C clauses

11.2 Option C specific identified and defined terms.

20.4 Consultant provides forecast of total Defined Cost/expenses.

24.4 Consultant to submit pricing information for each subcontract.

50.7 Payments in other currencies.

50.9 Opportunity for finalising Defined Costs for part of the works.

52.3 Requirement for Consultant to keep records.

54.1/2 SM assesses Consultant’s share of the Prices and actual defined cost.

54.3 Provisional assessment of Consultant’s share following Completion.

54.4 Final assessment of Consultant’s share following Completion.

55.2 Clarifies that information in Activity Schedule is not Scope.

93.3 Rules on assessing share in event of termination of the contract.

NEC4 PSC Additional Option E clauses

11.2 Option E specific identified and defined terms.

20.4 Consultant provides forecast of total Defined cost at contract intervals.

24.4 Consultant to submit pricing information for each subcontract.

50.8 Payments in other currencies.

50.9 Opportunity for finalising Defined Costs for part of the works.

52.3 Requirement for Consultant to keep records.

NEC4 PSC Secondary Options

X1 – Price Adjustment for Inflation

X1.1 Defined terms – Base Date Index, Latest Index, Price Adjustment Factor.

X1.2 How Price Adjustment Factor is applied.

X1.3/4 Price adjustment for amount due.

X1.5 Defined cost for compensation events.

X2.1 X2 Changes in law – CE if occurs after the Contract Date.

X3.1/2 X3 Multiple currencies – payment and exchange rates.

X4.1/2 X4 Ultimate Company Guarantee – given within 4 weeks of Contract Date.

X5.1 X5 Sectional Completion – Completion/Completion Date apply to sectional.

X6.1 X6 Bonus for Early Completion – paid per day at rate in CD1.

X7 – Delay Damages

X7.1 Charged at rate stated in CD1 until Completion or take over.

X7.2 Client repays overpayment of damages with interest.

X7.3 Delay damages are reduced with partial take over.

X8.1-3 X8 Undertaking to Others – as stated in CD1.

X9.1 X9 Transfer of Rights – Client owns the Consultant’s rights over materials.

X10 – Information Modelling

X10.1 Defined terms.

X10.2 Consultant collaborates with other Information Providers

X10.3 Early warning requirement for anything could impact Information Model

X10.4 Submission of Information Execution Plan.

X10.6 Compensation events.

X10.7 Client and Consultant liabilities.

X11.2 X11 Termination by Client – procedures and amount due to be paid.

X12 – Multiparty Collaboration

X12.1 Identified and defined terms.

X12.2 Actions to be taken by Partners and Core Group.

X12.3 Collaboration by all Parties.

X12.4 Incentives – amounts paid to Partner if KPI(s) achieved.

X13.1 X13 Performance Bond – required as stated in CD1.

X18 – Limitation of Liability

X18.1-3 Limits of liability as stated in Contract Data part 1.

X18.4 Consultant not liable for defect identified after liability.

X20 Key Performance Indicators and Reporting Requirements

X20.1-5 As per CD1.

Schedule of Cost Components (for use with options C/E)

11-13 Payments applicable for people.

21 Payments applicable for subcontractors.

31 Cost of charges paid or received by the Consultant plus overhead %.

4 Insurance premiums and insurable events excluded from cost.

Short Schedule of Cost Components (for use with options A)

11 Payments applicable for people