The new 'dividing date' concept at 63.1 is interesting. It tries to clarify the confusion which currently exists about when you shift to using forecast, rather than actual, costs; and will also be used for identifying the relevant accepted programme. Clause 65 introduces a new process for proposed instructions aimed at allowing more flexibility; while the well-known clause 65.2, which prevents revisions to a compensation event if the forecast is wrong, has been amended to allow for changes if the contract explicitly says so. Core Clause 7: title A new clause 74 gives the contractor the right to use client materials, but only to "provide the works". That right can also be made available to a subcontractor. Core Clause 8: liabilities and insurance As with all NEC4 contracts, the parties to a PSC are required to act in a ‘spirit of mutual trust and co-operation’ and give early warnings of anything that could affect time, cost or usefulness of the service so it can be mitigated without delay. were incurred because the Contractor did not follow the acceptance or procurement procedures laid down in the Works information or didn’t give an early warning notice as required. The NEC4 Engineering and Construction Contract (ECC) is the main works contract in the NEC4 suite of collaborative, flexible and clearly written contracts for built environment procurement.

Helpfully, 13.4 makes it clear that if the project manager (PM) rejects something in the contractor's programme, the PM must provide reasons "in sufficient detail to enable the contractor to correct the matter". At 11.2(19), there is a new definition of subcontractor which excludes labour suppliers. This had been an issue in practice. The works are constructed by multiple subcontractors who are directly employed by a management contractor. The management contractor will be responsible for the procurement, coordination, and implementation of works in exchange for a fee. This means the client often takes on the financial risk. If you need assistance with live or upcoming NEC projects, Ramskill Martin’s Team of Consultants have an experienced team which can help.For example, let’s say a contractor won a bid for some work under NEC Option B. Within the tender would be a priced contract with a BoQ. Within the BoQ, there is an item for installing a new fence around the boundary of a garden. If done well and promptly, it enables the Contractor and the Employer to properly manage both cost and value. About the Author

This option can either be Cost Reimbursable or pre-agreed Lump Sum. This Option is used with a Professional Services Contract for the appointment of consultants, paid on a time basis or pre-agreed cost. Under NEC, there are 7 different options for procuring work. This article will provide descriptions of how each option works and explore the pros and cons to establish which option works best for you. Briefly, the options are titled as follows: Secondary Options Y(UK)1 – project bank account, Y(UK)2 – ref. the ‘Construction Act’, and Y(UK)3 – The Contract (Rights of Third Parties) Act 1999. In addition, contract data has been simplified and the schedule of cost components has been changedClause 52.4, the ‘open book’ clause, allows the service manager to access the records required to be kept. This may present a problem for the consultant, especially if the service manager (new to NEC4 PSC and carrying out a role similar to the project manager in ECC) is an employee of a competitor. The consultant is very likely at least to want to put a confidentiality agreement in place (this is not provided for in NEC4 PSC). The details of defined cost are set out in the SCC. Defined cost in the SCC

Evans, S. C., NEC3 compensation events: a practical guide, published April 2013, accessed 13 June 2023 There have been four editions, the first in 1993, the second in 1995, the third in 2005 and the most recent in 2017. [6] The NEC3 was launched in 2005 and it was amended in April 2013. The NEC Users' Group, with over 400 members worldwide, brings together organisations and individual users of the NEC contract suite to exchange knowledge and best practice. [7] History [ edit ] The Hong Kong government decided to use NEC3 contracts generally for all government projects tendered in 2015/16. After a series of successful NEC3 projects in the region, the Hong Kong government announced in November 2016 that the NEC contract suite would be used for all future public works projects as far as practicable. [12] Since 2017, Hong Kong has progressively moved to adopt NEC4. [13] NEC4 [ edit ] This contract is for anyone providing a service, rather than undertaking any physical construction works. Designers are the most obvious party to fit into this category. Whilst they are producing a design for an employer or contractor, they would sign up and follow the clauses within the PSC. Most of the clauses within this contract are the same or similar to those in the main ECC contract, so that all contractors, designers and subcontractors have broadly the same obligations and processes to follow as each other. The PSC can be used in a wide variety of situations with relatively little change required. [20]Each of the different contracts listed above comes with its own set of guidance notes and flowcharts which should aid understanding of the intent of the drafted clauses. The guidance notes expand on each clause to give extra substance and intent of the original drafters as to how a clause should be understood and interpreted. 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. Throughout the works the Contractor is reimbursed for his “Defined Costs” plus fee minus any “Disallowed Costs”.