Suites of Contract

Question 1

What are the NEC Options of Contract?

Answer 1

A BEFORE B!
A - Priced w. Activity Schedule
B - Priced w. BoQ
C- Target w. Activity Schedule
D - Target w. BoQ
E - Cost reimbursable
F - Management Contract
G - Term Contract

Question 2

What are the JCT suites of Contract?

Answer 2

D&B
Intermediate
Standard Form
Minor Works
Major Project
Management Contract
Construction Management
Measured Term

Question 3

What is the difference between JCT & NEC suite?

Answer 3

JCT = Legal jargon NEC = collaborative

Provisional sums - JCT yes, NEC no

Programme - JCT not contractual document, NEC very important, regularly updated (float, completion float, time risk allowances)

Payment - JCT (clause 4), easy to follow. NEC (clause 5, Y(UK)2 and Contract Data Part 1, 3 separate locations

EOT / L&E - JCT separate, RM / RE. NEC CE dealing with both

Roles - JCT CA / EA. NEC PM, no QS

Cost scrutiny - JCT some via CSA and tender negotiations. NEC “open book” with key concepts of defined cost and disallowed costs

Question 4

Why use standard forms?

Answer 4

Saves time

Recognisable in industry

Designed to be comprehensive and cover pitfalls usually seen

Allocate risk in a fair and reasonable way

Reflect benefits accrued through precedent

Question 5

What are Compensation Events?

Answer 5

Compensation events covered under contract conditions. Deal with cost effect of changes and any extension of time that is due

Question 6

What are the NEC suites of contract?

Answer 6

• Engineering and Construction contract (ECC)
• Term Service contract (TSC)
• Professional Services contract (PSC)
• Supply contract (SC)

Question 7

Give examples of CE’s?

Answer 7

Instructions to change the service
Failure to provide access
Exceptionally adverse weather
Force majeure

Question 8

How are compensation events dealt with under NEC?

Answer 8

• Contractor to notify of the CE within 8 weeks of becoming aware of the event (if not, no entitlement to time or pay)
• PM has 1 week to confirm if it is to be considered a CE or not
• Contractor has 3 weeks to prepare quote
• PM has 2 weeks to respond

Question 9

What are the key differences between NEC3 and 4?

Answer 9

NEC 4 was released in 2017.

• 2 new contracts including “Design, Build and Operate Contract” and the “Alliance Contract”
• Final Account must be issued once contractor has performed contractual obligations
• Risk Register has been re-named as “Early Warning Register”
• Dispute negotiation - a 4 week period for escalation and negotiation of a dispute has been introduced which takes place prior to commencing formal proceedings
• Retention - Secondary Option X16 includes option for retention bond