Nec option b contract pdf
The New Engineering Contract NECor NEC Engineering and Construction Contractis a formalised system created by the Institution of Civil Engineers that guides the drafting of documents on civil engineering and construction projects for the purpose of obtaining tendersawarding and administering contracts.
The contract consists of two key parts the Contract Data part one Data provided by the Employer and Contract Data part two Data provided by the Contractor. Several approaches are included making it a family of options. There have been four editions, the first inthe second inthe third in nec option b contract pdf the most recent in NEC4 was announced in March and has been available since June This new edition reflects procurement and project management developments and emerging best practice, with improvements in flexibility, clarity and the ease of administration.
It also introduces two new contracts: When it was first launched init was simply the "New Engineering Contract". This specific contract has been renamed the "Engineering and Construction Contract" which is the main contract used for any nec option b contract pdf based project. It nec option b contract pdf sits alongside a number of other contracts that together should mean that the NEC suite is suitable for what ever stage of a lifecycle the project is at and for any party within a project.
The contracts available within the suite are:. Suitable for any construction based contract between an Employer and a Contractor. The core clauses of the main option listed above are used in conjunction with the secondary options and the additional conditions of contract. The clauses of these options have been be adapted for simpler less risky work short contractsfor use as subcontracts, and for professional services such as design as below.
There is very little difference between the ECC and the ECS, other than the nec option b contract pdf of the parties are changed contractor and subcontractor and some of the timescales for contractual responses are altered to take into account the timescales required in the ECC contract. This is an abbreviated version of the ECC contract and most suitable when the contract is considered "low risk" not necessarily low value on a project with little change expected.
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. Allows the contractor to sub-let a simpler lower risk contract down the line to a subcontractor.
This contract is for anyone providing a service, rather than doing nec option b contract pdf physical construction works. Designers are the most obvious party that fit into this category.
Whilst they nec option b contract pdf 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 pretty much the same obligations and processes to follow as each other.
This was added to the family in April 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. It is frequently used as a subcontract to the PSC for design work. Parties enter into a "framework" of which work packages will then be let during the life of that framework.
Any individual projects will then be awarded using one of the other contracts within the suite, meaning that the parties follow the headline clauses within the framework contract which is a fairly slim contract and then the individual clauses within the chosen contract for that package.
Different work packages can be let using different contracts during the life of the framework. For parties on a project that is operational or maintenance based, e. This contract is not generally used for constructing new works, but can include some amount of betterment. It is an abbreviated version of the main TSC. Nec option b contract pdf contracts were launched in The Supply Contract is for big bespoke items i.
Neither of these contracts cover working on a Site. If there is a dispute between the parties on a project then the Adjudicator will follow the clauses within this contract in order to come to a decision.
It can include a range of different services to be provided before, during and after engineering and construction works are completed. It was created to support Clients who wish to take a step forward by fully integrating the delivery team for large complex projects. 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 basis of the contract will be that all parties work together in achieving Client objectives, and share in the risks and benefits of doing so. For each of the different contracts listed above each 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. 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.
For civil engineering the need for a formalized approach to contracts led the Institution of Civil Engineers to produce the ICE formalized set of conditions of contract. Inthis resulted in a consultative form of the New Engineering Contract form of contract. The first edition was published in NEC's history started in when Martin Barnes was commissioned to start drafting a contract to nec option b contract pdf good project management. The first edition of NEC was launched in Nec option b contract pdf arrived two years later, in After a nec option b contract pdf of successful NEC3 projects in the region, the Hong Kong government announced in November that the NEC contract suite will be used for all future public works projects as far as practicable.
The following demonstrates the differing approaches to drafting in the NEC and ICE forms of contract using the illustration of circumstances when the contractor is entitled to additional time and cost for physical conditions. Other common misinterpretations are minutes of meetings as communicationsdeleted work and paying for correcting defects. Employers often utilise the additional conditions of contract Z-clauses to amend or delete contract provisions relating to these items.
The assessment of the value or cost of change under NEC3 is fundamentally different from other standard forms of contract and requires considerable thought as to how the rules should be applied. The concept is that the Contractor should recover his costs 1 resulting from the Compensation Event, rather than risk contract rates being used as the basis of valuation.
There has been limited research produced reviewing this element of the Compensation Event mechanism, which arguably is the most important as it is the building blocks by which the value of Compensation Events is assessed.
There is often confusion as to what is and is not included in the various elements of the SCC. Defined Cost applies to the additional payments for Compensation Events 2. This includes additional costs whether or not they are subject to a Compensation Event. For the inexperienced user of NEC, it is difficult to comprehend that the same words have two different meanings. Respondents to the questionnaire did not have a good understanding of this fundamental element of the Compensation Event mechanism.
The most striking comment was raised by the Project Manager in his interview:. There are two schedules which assist with valuing Defined Cost. This raises questions as to whether the use of these schedules for valuing Compensation Events is working in practice. The general consensus from interviews was that they were not used and could be simpler and streamlined. There are not very many similar documents and people sometimes confuse it with Daywork under JCT Contracts.
I really do not see the point in having two schedules of cost components. The research has shown that the two schedules used for assessing Compensation Events are often not used and people in the industry refer back to the traditional use of rates and quotations, and not Defined Cost. The review of these projects shows that the pricing of Compensation Events and the proving of Defined Cost requires considerable resources and can become a time consuming and inoperable burden if the contract is followed rigorously.
The assessment of Compensation Events is governed by the use of Defined Cost. There is a general misunderstanding of this fundamental element of the Compensation Event mechanism. When asked to state the correct meaning of Defined Cost under each of the Options, there was a high level of misunderstanding of what the term meant.
The interviews conducted confirmed this misunderstanding. The traditional use of rates and subcontract quotations seems to continue. The most striking comment was raised by the Project Manager in his interview: Each schedule is split into the following sections: While the Adjudicator gave the following comment: Self-employed people — People or sub-contract arguments? Average rates for operatives should not be used. Actual cost of operatives.
Arguments over who is included in people or fee. Arguments over what is included in people costs. Different companies include for costs related to people differently i.
Arguments whether Equipment schedules pass down from Main Contractor to Subcontractor when contract tries to back to back badly. Requesting precise details of Equipment such as formwork used.
Requesting to see all Equipment invoices. Questioning productivity of Equipment plant when allocated to a CE. Manufacture and Fabrication No arguments raised in the projects reviewed. Design No arguments raised in the projects reviewed. Insurance No arguments raised in the projects reviewed. Misunderstandings between Actual Costs and Defined Costs. What is included in schedules and what is in the fee percentages?
Insistence on actual records to the penny. An administrative burden on the Contractor to prove his Defined Cost. Not the intention of the contract, but this is how it can be interpreted and used.
Insistence on seeing wage slips — Data protection issues. Equipment rates in, say, CECA schedule being higher than the actual costs incurred. Requesting to see all material invoices.
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