New Engineering Contract
[1][2] NEC has become the default suite of contracts for public-sector works, services and supplies in the United Kingdom and Hong Kong.
NEC contracts have also been successfully used in Australia, Ireland, the Netherlands, New Zealand, Peru, the Philippines, South Africa, UAE, and many more.
[4] Originally contracts in the civil engineering and construction industries were bespoke and drafted by Chancery pleaders using their knowledge of leases rather than building processes.
This suite was used in projects such as Crossrail, London 2012 Olympic and Paralympic games,[7] Halley VI in Antarctica, and the Tin Shui Wai Hospital in Hong Kong.
[citation needed] NEC3 was endorsed by the Construction Clients' Board (formerly Public Sector Construction Clients' Forum), Crown Commercial Services, the Facilities Management Board of the UK Cabinet Office, the South African Construction Industry Development Board, the International Organization for Standardization (ISO), the Association for Project Management (APM) and the British Institute of Facilities Management (BIFM).
This new edition reflects procurement and project management developments and emerging best practice, with improvements in flexibility, clarity and the ease of administration.
[citation needed] NEC documents use some of their own terminology in a specific manner, for example "compensation event" is a term used to encompass variations, losses and expenses, and extensions of time.
Within the ECC contract there are six family level options, from which the Employer is to choose the most suitable and offer the best option/value for money on that project: These options offer a framework for tender and contract clauses that differ primarily in regard to the mechanisms by which the contractor is paid and how risk is allocated and motivated to control costs.
The clauses of these options have been be adapted for simpler less risky work (short contracts), for use as subcontracts, and for professional services such as design as below.
This contract is still between the employer and contractor but does not use all of the processes of the ECC making it simpler and easier to manage and administer.
The Engineering and Construction Short Subcontract (ECSS) Allows the contractor to sub-let a simpler lower risk contract down the line to a subcontractor.
[18] The Professional Services Short Contract (PSSC) This was added to the family in April 2013 and was co-developed with the Association for Project Management.
It is for simpler less complex assignments than the PSC, such as the appointment of small team for managing an ECC contract on the Employer's behalf.
The ALC should be used to engage in a single collaborative contract with a number of participants in order to deliver a project or programme of work.
The flowcharts then map out each of the main processes within each contract and demonstrate how it should operate and what to do next if a party has or has not carried out the next contractual action.
[21] Excessive use of Z clauses has been criticised as "onerous" and "poorly drafted"; NEC guidance states that "additional conditions should be used only when absolutely necessary to accommodate special needs".
[22] Guidance notes and flow charts are published by the ICE, which are supplemented by the frequently asked questions sections of the NEC website.
The often unintended Option C scenario where a Contractor is paid monies in excess of the Target Cost plus maximum share provisions is specifically not addressed in the guidance notes or frequently asked questions.
