NEC - Partnering Happy Ever After

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The NEC Contracts| February 2010

The NEC is a modern day family of standardcontracts that truly embraces the conceptof partnership and encourages employers,designers, contractors and project managersto work together through both a powerfulmanagement tool and a legal frameworkto facilitate all aspects of the creation ofconstruction projects.The NEC Contract is a legal framework of projectmanagement procedures designed to handle all aspects ofthe management of engineering and construction projects.Its benets - stimulus to good management, exibility andsimplicity - can be applied to any project, large or small.

The NEC is one of a number of forms of contract thatare available for use by the Public Sector and as with allprocurement strategies careful consideration has to begiven as the appropriateness of the NEC compared to otherroutes. EC Harris uses and recommends many differentmethods of procurement.

THE NEC CONTRACTS -PARTNERING HAPPYEVER AFTER

Benets Flexibility It is a modular form of contract with a choice of

pricing options and risk allocation coupled witha series of secondary options, which can be usedto tailor the contract to suit project specicrequirements. Design responsibility can also residewith either party in whole or in part.

Clarity and Simplicity The written language used is ordinary, with

limited use of legal terminology, simple lines ofcommunication and the use of subjective decisionsminimised.

Facilitator of Effective Project Management The contract is a management tool which drives

clear and timely decision making; clearly allocatesresponsibility and drives the foresightedmanagement of risk and change.

Encourages Collaborative Workin g The contact requires the parties to operate in a

spirit of mutual trust and co-operation.


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OGC Endorsement of NEC3From the UK, NEC3 (the 3rd edition of the NEC suite) has

been endorsed by the Ofce of Government Commerce(OGC) due to its compliance with the principles ofAchieving Excellence in Construction.

The NEC is the only contract, which has an OGCendorsement, and due to this and its successful track recordits use is rapidly expanding in the public sector.

Market needsIn order to deliver the benets of the NEC, employers mustunderstand the NEC is a fundamentally different form ofcontract requiring intensive management and a differentapproach by the parties in terms of both documentation andmanagement requirements.

Commercial and project managementThe roles and responsibilities under the NEC are differentto other forms of contract as are the managementprocesses, which the contract requires. EC Harris cansupply commercial and project management staff that haveexpertise and experience in the practical delivery of NECcontracts.

We can offer internal training and accreditation plus accessto expert advice and support. Our service also includesForensic Cost Auditing for the cost reimbursable and targetcost options. We deliver the proactive management ofchange as required under the contract.

Procurement advice and contractdrafting / reviewClients are often required to use the NEC or decide to usethe NEC without having any experience in its use. Theyunderstand what they are trying to achieve but do notunderstand how the NEC should be developed and appliedto achieve these objectives. This often leads them to developa procurement strategy and contract documentation whichis inappropriate and actually in conict with the NEC leadingto discrepancies and disputes and most importantly a failureto achieve the benets of the NEC.

OGC recommends the use of the NEC3 by public sector construction procurers

on their construction projects.

EC Harris has supported clients in the development ofprocurement and contract strategies, which are designed tomeet client objectives using the NEC as an enabler.In particular EC Harris can offer the knowledge andexperience to amend the contract to suit client requirementswithout causing conict or grey areas. Access to EC Harrisexperience and lessons learnt can be built into procurementand contract strategies to avoid potential pitfalls andproblems.

We can advise on the selection of the most appropriatemain and secondary options and access standard formsused as part of our contract administration processes aswell as ow charts and management processes.

EC Harris training and deliveryEC Harris has developed a range of training courses for theNEC suite. The courses are typically tailored to suit clientspecic requirements and take into account client specicamendments to the standard forms.

The courses take the form of either interactive presentationsor workshops:

Introduction to the NEC family of contracts Overview of the NEC Contract Administration and Practice Application Programming and Time Issues Key Issues and Lessons Learnt Prepare and Managing the ECC / TSC Managing the Target Cost Contract Open Book Cost Accounting and Cost Auditing Tendering under the NEC.

Our training focuses on practical application of the contractas opposed to theory. We share our experience and lessonslearnt with training tailored to suit the client, not off theshelf . We are actually retained by the NEC to delivertraining on their behalf and have direct links into the draftersof the Contract and the NEC User Group.


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NEC positive outcomesEC Harris has worked on more than 2000 projects that haveused the NEC conditions of contract. We have experience ofall of the Main and Secondary Options.

We are familiar with the entire suite of contracts and inparticular the Engineering and Construction Contract,Engineering and Construction Short Contract, theProfessional Services Contract and Terms Service Contract.We have been involved with the 3rd Edition of the NECsince its launch and have provided support, assistance andtraining to clients on its implementation.

EC Harris is the rst company appointed to advise theHong Kong Government on the implementation of the NEC.We have been providing training in Hong Kong since 2006.Our consultancy service and training can be given in Englishand Cantonese.

EC Harris is an active member of the NEC User Group. Wedeliver a wide range of training courses on the NEC Suite ofContract.

We nd that this benets our clients directly through accessto the EC Harris way of using the NEC.

A comprehensive list of lessons learnt A practical knowledge and application of the contract as

opposed to a theoretical approach A tried and tested library of standard amendments Client access to EC Harris group knowledge A tried and tested training programme Relevant information incorporated into our web enabled

service delivery system.

About usEC Harris is a leading built asset consultancy generatingpositive outcomes to clients business opportunities andchallenges. We help our clients getting the most from builtassets, working with them to plan and execute strategies thatoptimise the construction, operations, use and ownership of

built assets.

Our global Contract Solutions team counts over 100specialists operating from ofces in Asia, the UK, mainlandEurope and the Middle East. We provide strategic contractadvice and solutions to prevent, mitigate and resolveconstruction engineering disputes. Senior members alsoact as arbitrators, mediators, adjudicators and expert witnesson disputes across all sectors of the construction and

engineering industry internationally.

Contacts Ivan Cheung Partner

t +852 2263 7304 e [email protected]

Mike Allen Partner

t +852 2263 7301 e [email protected]

echarris.com/asia

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NEC - Partnering Happy Ever After