New Engineering Contract is a contracting system developed to effectively manage a project from the inception to the final phase of the construction project. These contracts are described and written in simple English and designed in a structure that is easily understandable.
Conventional contracts had several setbacks that led to an upturn in conflicts of interest and dispute rates. NEC contracts were introduced in 1993 with the aim of mitigating disputes in construction undertakings. Therefore, NEC was introduced by the UK Institute of Civil Engineers to replace conventional contracting methods.
It is commonly observed that most of the disputes in a construction undertaking are born when quality, cost, and time constraints are compromised. These contracts clearly define, in legal terms, the roles and responsibilities of the contractor and the client. NEC contracts would aid in producing a high-quality product at desired cost and within the given time frame.
In 2005, a third edition of the contracts was published as NEC3.
NEC is a family of contracts with each having its own, specific set of traits. The following are the characteristics of this contracting system: These traits make them an exceptional adaptation for the contracting system and make the undertaking efficient in terms of management.
Contract documents can be defined as a written basis for the contract that describes the work, stakeholders, and roles. Every contractual system has to go through several sets of documents before its practical application. Similarly, the following are the set of contract documents related to NEC:
It has been usually observed that NEC3 contracts entail nine clauses, which are:
This increase in collaboration can be achieved by introducing certain clauses that add more value to both client and contractor. These clauses and roles wouldn’t be biased and would consider the interest of both contractors as well as clients. Most of the ongoing work is related to the improvement of collaboration among the parties involved in the construction undertakings.
These clauses would give the contractor the right to be involved in the conceptual design phase of the project. In November 2015, it was announced that NEC would publish Early Contractor Involvement (ECI) clauses. These clauses would make sure the contractor is provided with all the information they need and with lesser risk during the progress of work. Most of the contractors are liable to loss because they are not part of the early design stage which leads to inconsistencies in the estimate.
Most of the contract systems are biased towards the contractor. The terms of the agreement introduced by the client don’t care for the contractor. Some of these terms ask for subservience. NEC contracts are there for the advantage of both parties and it doesn’t allocate all the risk to one side.
The contractor doesn’t suffer from a lack of rights and enjoys a healthy working relationship with the client. This ultimately leads to the success of the project and the achievement of all project objectives. Furthermore, this contracting system doesn’t allow clients to treat the contract unfairly in matters of time, cost, and standard.