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514 views34 pages

NEC3 Final Powerpoint Presentation1

nec3

Uploaded by

Juan Alayo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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NEC3 Practical Perspectives

Frances Forward
haus ltd
NEC3: A consultant’s perspective

Jeremy Dixon
NEC3: A consultant’s perspective

• Where is a construction consultant involved in NEC3?


– 1) Acting for a head client;
– 2) Acting for a D&B contractor.
• 1) The Consultant’s roles:
• A designer and/or tender document production (ECC3)
• Works Information / Site Information preparation
• ECC3 tender appraisal matters
• Post contract: Project Manager, Supervisor roles
NEC3: A consultant’s perspective

• Where is a construction consultant involved in NEC3?


– 1) Acting for a head client
– 2) Acting for a D&B contractor

• A design appointment;
• Advice / assistance on ECSC3 (sub-contract)
administration issues?
NEC3: A consultant’s perspective

• Where is a construction consultant involved in NEC3?


– 1) Acting for a head client

• Procurement issues:
• Strategy and getting the Works Information to match!
• Works Information drafting / consensus – a fine art?
• Contract Data inclusions and “Z” clauses
NEC3: A consultant’s perspective

• The affect of “Z” clauses applied to ECC3


• A) Employer specific, wholly additional (stand alone)
conditions of contract;
• B) Express terms which purport to be ‘stand alone’ but in
fact conflict with / cut across the ECC3 core clauses; and
• C) Employer specific provisions which expressly amend the
ECC3 core clauses.
• The consequences of A) – C) for the Project Manager
and/or Supervisor
NEC3: A consultant’s perspective

• Project Manager – just how extensive a role?


• Supervisor – an easy role?
• Can an ECC3 contract be applied retrospectively?
• The consultant’s appointment terms and staffing resource
proposal
• Is delegation of duties as between the Project Manager and
Supervisor a good idea?
• When might the ECC3 be inappropriate for a project?
NEC3: A consultant’s perspective

• Project Manager – ensure consistency of resource under


professional appointment to match the contract
administration burden….!
• Project Manager – what areas of ECC3 typically fall outside
the expertise of the consultant?
• Sub-contract conditions acceptance [Clause 26.3];
• insurance policy documents scrutiny and acceptance
[Clauses 85.1, 87.1];
• A legal overview of a performance bond [Option X13].
NEC3: A consultant’s perspective

• Supervisor – ensure consistency of resource under


professional appointment to match the contract
administration burden…!
• Supervisor – what elements of the role require certainty?
• Precisely what ‘tests and inspections’ does the Works
Information state?
• Is checking / verifying of off Site materials vesting required?
NEC3: A consultant’s perspective

• Where is a construction consultant involved?


– Acting for a D&B contractor

• Consensus on NEC PSC3 content


• “Scope” issues to match ECC3 Works Information
• PSC3 Contract Data and back-to-back “Z” clauses
NEC3: A consultant’s perspective

• Where is a construction consultant involved?


– Acting for a D&B contractor

• Post contract [ECC3] advisory issues


www.mottmac.com
The NEC Contract

A Legal Perspective

Shy Jackson
Introduction
• Background to the NEC Contract

• The legal framework

• Specific issues

• Conclusions
Introduction
• Introduced in the early 1990s

• A move away from traditional forms of contract

• Based on collaboration, transparency and


communication

• Used on high profile projects e.g. Terminal 5, Olympics


and Crossrail

• Endorsed by the OGC, ODA and ICE


Legal Framework
• Complete Suite of Contracts

• core clauses, main option clauses, secondary option


clauses, z clauses, contract data and works information

• Guidance notes – not part of the contract and “…should


not be used for legal interpretation of the meaning of the
ECC.”
Shopping basket

A B
Priced with Priced with
Activity Schedule Bill of Quantities

Core
C Clauses D
Target with Target with
Activity Schedule Bill of Quantities

E F
Cost Management
Reimbursable Contract
Secondary Option Clauses
Bonds and Retentions Inflation
Guarantees and Currencies

Incentives –
Housing Grants Act Partnering KPI, DLAD,
Bonus, PLAD

Design Sectional Changes in


Responsibility Completion Law

Third Party Limitations of


Rights Act Liability

Disputes
Common Issues
• Mutual trust and co-operation

• Programme

• Payment

• Compensation Events

• Completion
Core Clause 1

“10.1 The Employer, the Contractor, the Project Manager


and the Supervisor shall act as stated in this
contract in a spirit of mutual trust and co-operation.”

•What does this mean?

•How does it work in practice?

“25.1 The Contractor co-operates with Others in


obtaining and providing information which they need
in connection with the works.”
The Programme
• 31.2 sets out the programme contents in detail, including:

– Method statements identifying equipment and resources


– order and timing of work by Employer and Others
– Dates for completing works needed for Employer and Others to do their works
– Float, time risk allowance, contract procedure
– Effects of implemented Compensation Events and Notified Early Warnings
– Ways of dealing with delays and defects
– Any proposed changes

• Acceptance process and grounds for rejection

• Sanction in clause 50.3 - 25% of payment withheld

• How does this work in practice?


Payment – Option C
During Works

• Payment based on actual costs less Disallowed Costs

• Prices/Targets are only adjusted based on


Compensation Events

On completion

• If actual cost exceeds the target – Pain is shared


• If actual cost below the target – Gain is shared
Pain and Gain

TARGET COST AND ACTUAL COST


Pain and Gain

LOST
PAYMENT

PAIN SHARE

TARGET
Payment – Option C
Therefore:

• Understand what are Disallowed Costs

• Assess and implement Compensation Events correctly

• The key is educating the entire team


Compensation Events
• Intention to deal with delays and cost increases as they
happen, looking forward

• No separation between time and money provisions

• Contractor’s risk if an accepted quote is inadequate

• Exhaustive but wide list of Compensation Events

• Procedure for submitting and accepting quotes


Notification of Compensation Events
Notification – clause 61.3

• When the Contractor believes the event is a


compensation event

Time bar – clause 61.3

• Notify within 8 weeks of becoming aware of the event or


no entitlement

• How does this work in practice?


Completion
11.2(2):

“Completion is when the Contractor has

• Done all the work which the Works Information states he is to do by


the Completion Date and

• Corrected notified Defects which would have prevented the


Employer from using the works and Others from doing their work.

if the work which the Contractor is to do by the Completion Date is


not stated in the Works Information, Completion is when the
Contractor has done all the work necessary for the Employer to use
the works and for Others to do their work.”
Conclusions
• Read and understand the contract as early as possible
and consider the practicalities

• Operate the NEC correctly to obtain the benefits

• There are practical solutions to any difficulties

• If in doubt ask questions

• Education, Education, Education


Questions?
Contact:

Shy Jackson

Tel: 020 7418 7312

E-mail: shy.jackson@pinsentmasons.com
Working hard to make it easier
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OTHER UK LOCATIONS: BIRMINGHAM BRISTOL EDINBURGH GLASGOW LEEDS MANCHESTER

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