The Contractor should be aware that the notification provisions of the NEC Contract require the Contractor to inform the Project Manager for events that may result in additional time and/or money within a specified time frame. Failure to notify in accordance with these provisions will jeopardise the Contractor’s entitlement to additional time and/or money even if the Contractor is not at fault and the Employer is responsible for such an event.
June 6, 2019 | 2 minutes read
The New Engineering Contract (NEC Contract) was developed in response to a perceived backlash in the UK construction industry against the traditional forms of construction contract commonly in use, such as the Institution of Civil Engineers Contract (ICE) for civil engineering works and the Joint Contracts Tribunal Contract (JCT) for building works. The NEC Contract is now part of a larger suite of contracts with the current version, NEC4 released in 2017.
The NEC Contract attempts to diminish the adversarial nature of the construction contract by modifying the conventional roles of contract administration (by the inclusion of a Project Manager) and clearly establishing the roles and obligations of the Contractor, Employer and the Project Manager.
The NEC Contract enlists a proactive project management approach, specifically with regards to variations and relies on extensive notification protocol for identification and resolution of potential problems before they escalate. The NEC Contract also imposes an obligation of mutual trust and cooperation but falls short of being an actual partnering contract without the inclusion of Partnering Option X12.
The NEC Contract has a range of formats and options intended to suit the specific requirements of a particular project. At the basis of each NEC Contract are core clauses common to all formats, which can be customised by choosing payment and other contractual terms from the available primary and secondary options.
The NEC Contract is written in simplified terms using present tense with minimal legal jargon for ease of understanding. However, this informal language structure combined with the lack of cross-referencing between clauses may result in difficulties when subject to interpretation over disputes.
The Contractor should be aware that the notification provisions of the NEC Contract require the Contractor to inform the Project Manager for events that may result in additional time and/or money within a specified time frame. Failure to notify in accordance with these provisions will jeopardise the Contractor’s entitlement to additional time and/or money even if the Contractor is not at fault and the Employer is responsible for such an event.
The NEC Contract is suitable for use on building or infrastructure projects with options for various payment and procurement mechanisms such as fixed price, bill of quantities, target price, cost reimbursable and management. The NEC4 suite of contracts, in addition to the engineering and construction element, encompasses agreements for subcontracting, professional services, dispute resolution, supply, design/build /operate, framework, term service and alliancing.
January 25, 2021The NEC4 suite is generally easier to read than the GC21, for instance, and therefore it is more accessible to a wider portion of the project team members. A significant benefit however is that risks are distributed more in the contractor’s favour, more so than what is typically the case with Australian forms...
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January 22, 2021The Contractor should be aware that the notification provisions of the NEC Contract require the Contractor to inform the Project Manager for events that may result in additional time and/or money within a specified time frame. Failure to notify in accordance with these provisions will jeopardise the Contractor’s entitlement to additional time and/or money even if the Contractor is not at fault and the Employer is responsible for such an event.
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