RESOURCES | “Evolution not revolution”: NEC4 suite of contracts coming soon

Ruth Carins of Hills Dickinson writes:

On 3 March 2017, the forthcoming publication of an NEC4 suite of contracts was announced. It is anticipated that the new suite will be available to purchase from 22 June 2017.

While we expect further details of NEC4 to be made available in the lead up to the release date in June, we understand the current key changes to be as follows:

• Two new forms of contract to be added to the suite:
  • An alliancing contract (initially to be published in consultation form) – a multi-party contract based upon an integrated risk and reward model
  • A design, build and operate contract – aimed at clients who wish to procure design, construction, operation and/or maintenance from a single contractor
• Changes in terminology including:
  • ‘Employer’ is to become ‘Client’
  • ‘Scope’ replaces ‘Works Information’
  • ‘Risk Register’ becomes ‘Early Warning Register’
• Cost savings:
  • an ability for the Contractor to propose changes to the Scope, with any cost savings shared
  • the inclusion of a secondary option which allows the Contractor to suggest changes in the Scope to reduce the lifetime cost of the project, again with any costs savings shared
• A new secondary option to provide for design & build in the Engineering and Construction Contract (ECC) and ‘Undertakings to Others’ (collateral warranties clause)
• New provisions for BIM
• New secondary options – provisions for quality management, bribery, corruption, assignment, confidentiality and publicity which are often currently drafted in as Z clauses
• Additional compensation events – ability to include additional compensation events without the need for z clauses
• Programming – deemed acceptance of the programme in the event the project manager doesn’t respond
• Payment – interim payments will now require an application for payment, provisions relating to the finality of payment at the end of the contract and changes to the final account procedure
• Dispute resolution – introduction of a tired dispute procedure and a new dispute option W3
• Early Contractor Involvement secondary option introduced
• Contract data – reformatted
• Schedules of cost components to be simplified

This article was originally published on Place Resources.