The 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...
January 25, 2021 | 2 minutes read
The New Engineering and Construction Contract (NEC) suite of contracts originates from the United Kingdom and has been used on international projects for around 20 years.
The new NEC4 suite is the latest edition, and it is becoming increasingly prominent with Australian utilities and on infrastructure projects in Australia.
The NEC4 suite is generally easier to read than the GC21, for instance, and therefore it is more accessible to a wider portion of 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, as the contractor’s standard of care is limited to reasonable skill and care instead of, the more onerous and more common, ‘fit for purpose’ standard.
There are elements the promote collaboration by obliging the parties to act “in a spirit of mutual trust”. This is a vague condition, but it is intended to reinforce the notion that the parties must act in good faith in general and it remains to be seen how the Australian courts interpret this if it emerges in a disputed case.
Another feature that is unusual in Australian construction and engineering contracts is the dual function of the contract administrator (i.e., the Project Manager). This has been examined in well developed case law in the UK that will help Australian project stakeholders to navigate circumstances where the Project Manager must discard his allegiance to the Client when making technical determinations and certifications.
However, any benefits favouring the contractor do not diminish the scale of project and risk management processes that are hard-wired into the fabric of the contract. This means that the contractor’s administrative team must be well-versed in the operation of the contract in order to avoid impairing his rights by failing to adhere to the strict processes.
WK has developed training seminars, to be delivered in April and May 2021, and will be delivered by WK’s experienced construction professionals. The training will cover how the NEC4 addresses:
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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March 7, 2020This challenge for Contractors is heightened because the on-site personnel in their teams, that are best placed to have the most awareness and ability to control the causes of delay, are generally not experienced in contract administration to take precautionary or preventative steps to most effectively protect the Contractor's interests.
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