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NEC Contracts

This article gives you an understanding about NEC Contracts.

Updated today

NEC stands for New Engineering Contract. The NEC is a family of standard contracts, each of which has these characteristics:

  • Its use stimulates good management of the relationship between the two parties to the contract and, hence, of the work included in the contract.

  • It can be used in various commercial situations, serving a range of work types and in any location.

  • It is a clear and simple document in a language and structure that is straightforward and easily understood.

There are four editions of NEC. The latest edition of NEC4 was introduced in 2017, while the previous version, NEC3, was introduced in 2005. The process flow remains the same in both the recent editions of NEC, i.e. NEC3 and NEC4.

Differences between NEC3 and NEC4

  • New forms of contract - the Design Build and Operate Contract (DBO), the Alliance Contract (ALC), and the Facilities Management Contract (FMC)

  • Improved clarity and simplicity across the NEC4 suite

  • New and improved support for dispute avoidance, early contractor involvement, quality management, and more.

  • NEC4 is a positive evolution of NEC3, building upon and enhancing the previous generation

  • Innovative new features and new contracts help users further achieve improvements to the efficiency and outcome of their projects and work programmes

  • The style, layout, terminology and key project management processes that run through NEC3 contracts remain in NEC4

  • All of the changes are a direct result of feedback from the industry

Types of Contracts in NEC

ECC - Engineering and Construction Contract

PSC - Professional Services Contract

TSC - Term Services Contract

ECSC - Engineering and Construction Short Contract

ECS - Engineering and Construction Subcontract

SC - Supply Contract

A few other types of contracts are not widely used and are currently not a part of Asite Contract Manager.

Your Asite Professional Services Consultant can provide access to the contract forms for your project based on your needs. These forms will be available to you from a specific area, such as 'Project Forms' or 'Contracts', depending on how it is enabled.

ECC - Engineering and Construction Contract

Suitable for any construction-based contract between a Client and a Contractor. It is intended for all sections of the industry, including civil, building, nuclear, oil & gas, etc.

The ECC contract type is the most frequently used contract type from the NEC4 family. It is used in high-profile and everyday projects such as infrastructure, buildings, highways and process plants.

The key parties on the NEC4 ECC type of contract are:

Client

This is the organisation with which the Contractor has a contract, also called the client organisation.

Project Manager

This is the client's role on the contract. The Project Manager is the main contact person in the client organisation to oversee the contract.

Supervisor

The Supervisor works for the Client and checks that the works are constructed following the contract.

Contractor

This outlines the supplier's role in the contract. The Contractor is the main contact person within the Supplier organisation to oversee the contract.

In the Asite NEC4 Contract Manager, most of the roles used in your contract process may already be defined in the project to which you are given access. See examples below:

NEC-ECC-Client Draft for PM

NEC-ECC-Client View Only

NEC-ECC-Contractor

NEC-ECC-Contractor Draft for PM

NEC-ECC-Project Manager

NEC-ECC-Supervisor

NEC-ECC-Supplier View Only

For any questions regarding the configuration of roles, role privileges and form permissions specific to your project requirements related to the Contract process, please contact your Asite Professional Services Consultant.

Roles and Responsibilities

Roles

Responsibilities / Key Activities

Contractor

Raises early warnings with delay, cost and performance implications

Raise Compensation events

Submit the instructions to submit a quotation

Submit Quotations against CE

Submit the Assessment for the final remaining amount

Raise changes in scope

Raise Programme Submission

Communicate internally for queries with the Contract team

Raise late notices

Raise the extension period

Project Manager

Raise a Contract

Raise early warnings with delay, cost and performance implications

Review and acceptance of the Contractor’s design

Decide on the date of completion

Instruct the Contractor to submit/resubmit quotations

Acceptance of submitted quotations

Notify the contractor of compensation events

Raise an assessment against CE

Review Compensation events

Raise the extension period

Review completion certificates

Certify final payment for termination

Supervisor

Communicate with the contractor for contract-related queries

Raise defects in a Contract and notify the contractor of the defects

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