NEC4: Engineering and Construction Contract Option A: Priced Contract with Activity Schedule

Product Information

the risk profile and overall management strategy including, in broad terms, decisions made with regard who is best placed to manage the risks NEC4 has been updated in various ways to reflect modern construction practices (including greater reliance on technology) and to accommodate requests from users. Whether you have no previous experience with NEC contracts, or have worked on projects with NEC3, it’s helpful to understand some of the changes in the latest updates.

This option includes a target contract linked to an activity schedule. The target contract contains a price commonly referred to as a target cost.

Background

The contract preparation user guide helps clients prepare the particular NEC4 contract they have chosen to use to achieve their project objectives ready for supplier selection to commence. For each NEC4 contract, the relevant user guide includes Activity Schedule – A list of activities (prepared by the contractor), which they expect to carry out while providing the works. Each activity is linked to a price (prepared by the contractor) to be paid by the client. Early Warning Register: Helps create awareness about project-specific risks. This was called the Risk Register under the NEC3 contract. The starting point assumes the client has resolved its contract strategy and decided which contract to use, including the main and secondary options where relevant. Clause 81 has been amended to make the contractor's liabilities more clear, in contrast to the previous wording which assigned "all risk that the employer [now client] does not have" to the contractor. However, this raises the question about whether the client or the contractor will be deemed to carry anything not listed as either a client or contractor liability.

This option is a cost reimbursable option. Unlike Option E, this option is tailored towards the management contractor procurement route. a new value engineering reduction percentage clause 63.12, allowing the contractor to share in cost reductions obtained as a result of a contractor proposal; This option contains a priced contract which is linked to a Bill of Quantities (BoQ). The BoQ will contain project-specific measurements which are derived from the drawings and specifications. Each measurement will then be linked to a rate.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". Having been used on Velodrome and other major projects, it is no surprise to see that NEC contracts are gaining widespread recognition and adoption in the industry. There are numerous advantages that the model offers: