NEC3 Engineering and Construction Contract Option A: Price contract with activity schedule

Product Information

In principle, it is for the Contractor to identify how it intends to deliver the works and therefore to identify the activities that it considers necessary. In practise, however, the Employer is likely to want to specify at least a core set of activities to create some consistency during the tender process. Otherwise, Defined Cost is established by reference to the Schedule of Cost Components within the ECC. Depending upon the pricing option selected, there are 2 Schedules of Cost Components, the standard Schedule and the Shorter Schedule of Cost Components.

However, as mentioned above, the Guidance Notes prescribe, for Option A at least, that the list of activities is prepared by the Contractor. The Guidance Notes are silent on this point for Option C. It must be remembered, of course, that the Guidance Notes, while helpful, do not form part of the Contract and so the Parties are free to decide who prepares the list amongst themselves. What should be included in the schedule?

Construction Clients' Board endorsement of NEC3

Should Contractor price the Bill of Quantities or the Scope?: The Contractor only has the opportunity to price the items in the Bill of Quantities. Clause 20.1 obligates the Contractor to provide the works in accordance with the Scope. The Bill of Quantities is not Scope, so any ambiguities between an item in the Scope but not allowed for within the Bill of Quantities will need to be identified as an ambiguity in accordance with clause 17.1. This will require an instruction by the Project Manager to resolve the ambiguity, and assuming what is stated in the Scope is what is required, will need to correct the mistake within the Bill of Quantities (60.6). This should then also be confirmed as a compensation event under clause 60.7. The Contractor will be entitled to assess the cost and time implications that have resulted due to the error in the Bill of Quantities. It is assumed that for the ECC the Contractor is producing the activity schedule and takes the risk in errors. If the client has produced an activity schedule for the Contractor to price – the Contractor needs to make sure it covers all the Works Information as errors will still be a Contractor risk NEC's history started in 1986 when Martin Barnes was commissioned to start drafting a contract to stimulate good project management. The first edition of NEC was launched in 1993. NEC2 arrived two years later, in 1995. NEC2 was used to build the High Speed 1 railway, between London and the Channel Tunnel. [ citation needed] The works are constructed by multiple subcontractors who are directly employed by a management contractor. The management contractor will be responsible for the procurement, coordination, and implementation of works in exchange for a fee. This means the client often takes on the financial risk.

Subcontractors – a new category for NEC4 where Subcontractors costs can now be included as a lump sum, rather than having to break it down into the other categories listedAt a more detailed level, NEC3's approach to some of the common features and practices adopted in construction and engineering projects is quite different, including: The main difference between the options is how the Contractor gets paid, and how risk is allocated. A Client can include the requirement for the Contractor to be doing elements or all of the design by including such requirements within the Scope. This avoids the need for a separate “design and build” option within the NEC family of contracts.