As far as standard construction contracts go, the New Engineering Contract, NEC, could still be considered the ‘new kid on the bloc’ in comparison to others such as FIDIC and JCT, after being adapted from the Engineering and Construction Contract, ECC, in the mid 1990’s.
As with all construction contracts, NEC is not perfect, but in practice, no contract ever is or could be. However, the NEC suite of contracts certainly has a great deal of benefits and advantages which this blog will cover.
From the outset of implementing an NEC contract on a construction project, the parties know that programme, budget, and risk need to be managed throughout the entirety of the project, and more importantly this should be done collaboratively between the parties. A marked difference on traditional forms of contract and being built on collaboration is what sets NEC apart. So, what are the advantages? Let’s take a look:
- The first major advantage of NEC to take note of is its huge emphasis on ‘collaboration’between the client, contractor, and any subcontractors. Some experts within the industry have even said managing risk collaboratively with all parties – including sub-contractors – is the hallmark of NEC.
- Secondly, is the fact that the NEC suits of contracts is accessible and written in plain, clear and concise English. For a lot of people this is a welcome difference compared tomore traditional forms which contain legal language that can be hard to understand and even increase costs of administration, as external legal expertise may be needed more often to interpret and implement. This also makes it more precise and easier to understand.
- NEC focuses on pro-active risk management rather than on what happens when things go wrong. This can greatly benefit all parties to save cost and time by being pro-active rather than re-active.
- NEC’s core clauses are suitable and can be used for most procurement routes a client may choose to take. This means the NEC form of contract is extremely flexible.
- NEC actively tries to minimise disputes arising between the involved parties. Primarily through its use of Early Warning Notices, Compensation Events, and the project risk register.
If you want to find out more about the NEC contract, why not check out some of the other videos on our youtube channel and blogs. Specifically, our specialist NEC Series playlist!
Click the link here: https://youtube.com/playlist?list=PLEqD73qa8q9-qO2a-HHyZlX_gnjJ3xyho