nec contracts - why is... · • 1985 uk institution of civil engineers (ice) • review existing...

Why are they different?Global applicability and comparison with FIDIC

Richard PattersonNEC and Procurement SpecialistMott MacDonald

NEC Contracts

14/10/2019 c. Mott MacDonald | NEC Global Contract 2

Richard Patterson

Chartered Engineer

Mott MacDonald NEC Advisory Services

30Years with

Mott MacDonald

22Years with NEC

1 Year with NEC

as NEC

Consultant


NEC in Ireland

Haulbowline Remediation - Cork County Council Remediation of a potentially toxic dumping ground for slag and other waste materials

National Children's Hospital - Children’s Health

Ireland Two stage contract (Early Contractor Involvement) – cost overrun issues

Irish Water – Greater Dublin Drainage - OutfallMott MacDonald/RPS working with Irish Water – ECC4 contract planned

Luas Cross City line utility diversion works, Dublin,

Ireland - Transport Infrastructure Ireland (TII)Largest utilities contract in Ireland, ECC option C


NEC in Ireland

Dunkettle Interchange Upgrade - Transport Infrastructure

Ireland (TII)

NEC with target cost to procure John Sisk & Sons to design and build the upgraded junction under a

2 stage contract. (ECI).

‘Agreement (on price for Stage 2) has not been reached. ‘Both parties remain committed to

advancing the project. ……….

TII and Sisk will continue to work collaboratively by commencing advance works…..

TII will now move to tender for the construction contract. …..

Overall, this pushes the completion date back by 12 months.’


• NEC

• target cost

• ECI

• hop

• skip

• jump

• Nichols report to Highways England,

2007


NEC

• standardisation

• flexibility

• better processes for better time and cost

management

• supports & encourages collaborative working

• ideal for global projects and businesses

A better way of doing business

7

January 2013 – NEC Newsletter

International

Criminal Court (ICC)

in The Hague,

Netherlands under a

€147 million NEC

Engineering and

Construction

Contract option C

……first time that an

NEC3 contract has

been used on a

major construction

project in Holland.


Sir John Armit, Chair of

the Olympic Delivery

Authority on the BBC

describing the

collaboration that

delivered the London

2012 Olympics venues

‘We could not have done it without the NEC’


To start ‘NEC’ is now a ‘brand’

• New

• Engineering

• Contract

• > 25 years’ of use

• any project or service

• a management tool AND a contract


• 1985 UK Institution of Civil Engineers (ICE)

• review existing contracts and case law

• supported the development work for new contract

• 1991 - Consultative version - South Africa, Hong Kong, and UK

• 1995 - Engineering and Construction Contract (2nd Ed.)

• 10 years of successful use and expansion of NEC family

• 2005 - NEC3 launched - users’ feedback; new members

• 2005 - specifically endorsed by UK government

• 2009 – Hong Kong Government trialling NEC

• 2016 – NEC as preferred contract form for Govt projects in Hong Kong

• 2017 – NEC4 launched in June – evolution, not revolution

NEC is well proven


• Strengths – and pitfalls

• NEC compared with FIDIC

• Users - globally

• Mott MacDonald expertise

Plan


Plan

• Strengths –

and pitfalls• NEC compared with FIDIC




Problems with existing standard forms of contract

• Based on disputes and case law

• Reactive rather than proactive

• Not focussed on management procedures

• Insufficient emphasis on the programme

• Inflexible

True in your

world?


Where are the key problems with your ‘standard’ forms of contract?

16

Flexibility

Clarity and simplicity

Stimulus to good management

NEC’s core principles – why is it different?

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17


NEC’s core principles

14/10/2019


• plain, readable English

• excellent structure

• free from references to specific laws

• minor secondary options to suit specific

local law - eg Y(UK)2, Y(NZ)2

• so easy to translate, if required

NEC Clarity – You can read it


Language - FIDIC

The Employer shall indemnify and hold harmless the Contractor, the Contractor’s Personnel, and their respective agents, against and from all claims, damages, losses and expenses (including legal fees and expenses) in respect of (1) bodily injury, sickness, disease or death, which is attributable to any negligence, wilful act or breach of the Contract by the Employer, the Employer’s Personnel, or any of their respective agents, and (2) the matters for which liability may be excluded from insurance cover, as described in sub-paragraphs (d)(i), (ii) and (iii) of Sub-Clause 18.3 [Insurance Against Injury to Persons and Damage to Property].


Language. NECPresent tense and in English!

21

Flexibility


14/10/2019


NEC

• any aspects of any project, any service

• and supply

• ‘complex’ or ‘simple’

• any sector

Flexibility as you need it

• any procurement strategy

• any level of ‘Contractor’ design

• range of payment options

• clear and flexible risk allocation

What?

How?

• anywhere in the world Where?

ECCEngineering and Construction Contract

TSCTerm Service Contract

ECSCEngineering and Construction

Short ContractTSSC

Term Service Short Contract

PS

CP

rof’l S

ervic

es

Contra

ct

SC & SSCSupply Contract & Supply Short Contract

design construction operationbusiness case

ECSEngineering and Construction

Subcontract

ECSSEngineering and Construction

Short Subcontract

Framework Contract

Adjudicator’s Contract

Supply

Low

High

Pro

ject

Com

ple

xity

NEC3 family

PS

SC

Pro

f’l Servic

es

Short C

ontra

ct

14/10/2019 23

DBOCDesign Build and Operate Contract

PS

SC

Pro

f’lS

ervic

es

Subcontra

ct

design construction operationbusiness case

Dispute Resolution Services Contract

NEC4 new members

14/10/2019 24

Low

High

Pro

ject

Com

ple

xity

Alliance Contract TSSCTerm Service Subcontract

Putting the contracts together

14/10/2019 R Patterson - ECC in 30 flipcharts 25

Employer (ECC4 Client)

EC

C

Contractor

EC

S

Subcontractor

PS

C

design Subcontractor

EC

SS

Subcontractor

(less complex

work)

PS

C o

r

PS

SC

PS

C o

r

PS

SC

PSC or PSSCadvisor/

designer

Project Manager Supervisormgt mgt


A B C D E F

Z

1 - 9

W2

Flexibility – The ECC4

core clauses

payment option

dispute resolution option

secondary options

jurisdiction-specific

options

additional conditions

C

W1 W3W2

X1

X2

X3

X4

X5

X6

X7

X8

X9

X10

X11

X12

X13

X14

X15

X16

X17

X18

X20

X21

X22

X14

X14

X7

Y(UK)3Y(UK)1 Y(UK)2Y(UK)2


A – Priced contract with activity schedule

B – Priced contract with bill of quantities

C – Target contract with activity schedule

D – Target contract with bill of quantities

E – Cost reimbursable contract

F– Management contract

quantity

risk

efficiency

risk

Risk allocation by main Option

Contractor Contractor

Client Contractor

shared shared

Client shared

Client Client

Depends on Subcontracts

The target contract- the ‘Contractor’s share’

the Prices – the moving target!

time

amount

tendere

d total

of the

Prices

compensation

events

share

percentage

0

%

35

%

50

%

100

%

‘pain’

‘gain’

Em

plo

yer

Contr

acto

r

100 %

80 %

120 %

share

ranges

Completion

Price for Work Done to

Date (PWDD) Contractor’s share

14/10/2019

R Patterson - ECC in 30 flipcharts28

forecast

outturn

cost(or ‘period of

contract’ or

‘requirements’)

base

risk

timefeasibility, outline design, detailed design, construction

aw

ard

of contr

act

client’s risk

Contractor’s risk

‘total of the Prices’

‘shared’ ‘project

risk’ if option

C,D,E,F

Risk allocation for events

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R Patterson - ECC in 30 flipcharts29

Need to ensure that compensation events in contract

reflect those risks that client wishes to retain

ECI Stage 1 ECI Stage 2

30



14/10/2019



communicationsAccepted

Programme

compensation

eventsearly warning


Compensation events

(Almost) all in

one place

Assess time and

cost for all

Assess forecast

now – not ‘wait

and see’

Based on ‘real’

effect of event

Clear

timebound

process for

assessment

33

14/10/2019 c. Mott MacDonald | NEC Global Contract

Timescales for compensation events

33

PM notifies

PM instructs quote

revisePM to assess

Contractor quotes

3wk

Contractor aware of event

Contractor notifies

< 8 wks

PM replies

2wk

accept

or

PM says no

1wkECC3:

PM silent?

C notifies;

PM has further

2 wks;

otherwise

‘treated as

accepted’


So systematic, we can manage it ‘in the cloud’

• Several web-based tools available

• More difficult with FIDIC!

• Mott MacDonald has relationships

with suppliers

• Excellent tools to support and

promote professional contract /

project management


• Better risk management

• ‘Partnering’ and ‘collaborative working’

• Target contracts

• ‘Frameworks’

• ‘Early contractor involvement’ (ECI)

• Alliancing

• All the above have encouraged – and been supported by - the use of a modern form of contract……..

Procurement itself has moved on


– NEC requires rigorous management

– investment (resources) required for

• better project

• better project management

• better programme management

• ‘incremental certainty’

– do NOT ‘put the contract in the bottom drawer’

Pitfalls – Management?


Pitfalls?

• Different

• Mindset

• Delegation

• Clash with organizational procedures…. ….or

lack of them!

• Need for programming expertise

• Lack of understanding / training


• Culture

• People

• Training

• Systems

Need to address


• NEC designed to be used internationally

• His Honour Humphrey Lloyd QC considers that

there are no real barriers to the NEC3

‘Engineering and Construction Contract being

used internationally’

Pitfalls – jurisdiction?

• His Honour Humphrey Lloyd QC was a judge of the UK

Technology and Construction Court in London from

1993 to 2005 and has been a member of the

Commission on International Arbitration of the

International Chamber of Commerce (ICC) since 1980

• He presented on NEC at the ICE Management,

Procurement and Law Prestige Lecture, ICE, 24

November 2008


• But a legal review should be carried out in a new

jurisdiction

• Need to train the reviewer first in NEC

• Humphrey Lloyd gave pointers to few issues that should

be reviewed

• Summarised in:

• ‘Use of NEC in legal jurisdictions other than English

law’ Richard Patterson, NEC Newsletter, No,47, July

2009

Pitfalls – Jurisdiction?

14/10/2019

c. Mott MacDonald | NEC Global Contract

42

The truth will out

• NEC demands

good

documentation

• NEC demands

active

management

• culture, training and

systems are vital


Plan


• NEC

compared with

FIDIC• Users - globally



Style

• Focused on liabilities and risk

allocation in the manner of traditional

contracts

FIDIC

• Allows flexible and clear risk allocation

• Requires and enables more proactive, collaborative management of the project and the contract

• Proven to support and encourage partnering and more collaborative ways of working

NEC


Clarity

• 1999 update is clearer than

previous editions

• New 2017 edition claims to be

more management focused

• But 50,000 words

(compared with ECC’s

19,000)

• ‘Clarity and simplicity’ is one of

the three guiding principles of

NEC Contracts

• plain English

• easier to use - especially if

English is not the user’s

first language

• better for translation

FIDIC NEC


Flexibility – Range of ContractsFIDIC NEC

Consultancy White Book Professional Services Contract (PSC)

Professional Services Short Contract (PSCC)

Works Various contracts: Red,

Yellow and Silver (next

slide)

Engineering and Construction Contract (ECC)

Subcontracts Subcontract to Red Book Engineering and Construction Subcontract (ECS)

Engineering and Construction Short Subcontract (ECSC)

Services - Term Service Contract (TSC)

Design, Build, Operate Gold Book NEC4 Design Build Operate (DBO)

Framework - Framework Contract

Alliance - Alliance Contract (multiparty contract launched June 2018)

Joint Venture (JV) Joint Venture agreement for

international JVs

-

Lump sum

Reimbursable

(‘cost plus’)

Target

ECC

Option

A

B

C

D

E

Level of price c

ert

ain

ty

Extent of design by Contractor

0% 100%

FIDIC

Silver

Remeasuremen

t (BoQ)FIDIC

Red

FIDIC

Yellow

Flexibility with

NEC

Engineering and

Construction

Contract (ECC)

Flexibility – works contracts

Flexibility– smaller works contracts

lump sum

Extent of design by Contractor

Level of

pri

ce c

ert

ain

ty

0% 100%

Remeasurement

(BoQ)

FIDIC

Green

NEC

Engineering

and

Construction

ShortContract

(ECSC) ……… ……and some features

of draft ECSC

…...were used in ‘World

Bank Works -

Smaller

Contracts’…..


Stimulus to good managementFIDIC NEC

General -

Early warning

Programme

Specific objective of NEC

Specific times for specific actions from

people in the specific roles

Key for collaboration

Simple process requires parties to warn of

any issue that might impact on project.

These go to a register for regular discussion

If Contractor does not notify, any

compensation event is assessed as if it had

Contractor to submit

whenever progress is

inconsistent with programme,

or if required by Engineer

Extensive use of detailed Accepted

Programme which is used directly to

evaluate effects of compensation events.

Obligation to give notice in

Clause 8.3, but no follow up

process and no clear

consequences for not giving

early warning



FIDIC NEC

Change management Separate specific

provisions and

remedies for variations,

various different risk

events and claims.

All referenced to a

single ‘determination’

clause with specified

periods for notice,

details and Engineer

response – but no real

‘rules’

NEC is a change management process

All variations, risks with the Employer and

default by the Employer are ‘compensation

events’. These are clearly listed.

All are dealt with by same process which

encourages agreement of cost and time

effects and hence dispute avoidance.

Same rules for all events.

Tight timescales and clear consequences

for non-compliance

This in turn gives the buyer an ongoing

and better forecast of final completion

date and cost to the buyer.

51

International Use

• The most widely recognised and

used brand of standard form for

international contracts

• Multilateral Development Bank

Harmonised version (FIDIC ‘Pink’

Book) used by most international

funding agencies

• UK

• endorsed by government

• preferred form for infrastructure

• South Africa

• endorsed by government

• Hong Kong

• mandated by government for construction

• New Zealand

• The World Bank ‘Smaller Works’ contract

incorporates (not very well) some principles

from early drafts of the NEC

• Australia

• Sydney Water to use for 10 year programme

• Recorded use in 16 other countries

FIDIC NEC




• Users - globally• Mott MacDonald expertise

Plan


So who is using

NEC?

54


NEC Global

Some

Chinese

contractors

have used

NEC in India

Hong Kong

government

has

mandated

NEC from

2015

Sydney

Water –

Australia

2019

NEC used in UK, South Africa,

Hong Kong, New Zealand,

Dubai, Holland and ….

Antarctica

Peru –

Pan

American

Games

2019


• NEC is mandated by HK Government

for construction spend ….except with

justifiable exemptions

Hong Kong


• 27 NEC commissions from HK Govt

• 29 NEC contracts

• 15 ECC + 13 TSC + 1 PSC

• For 6 works departments: CEDD, DSD, HyD,

WSD & ArchSD, EMSD

• Total capital value HK$25,000m = £2.5 billion

Mott MacDonald success in Hong Kong since 2011


South Africa

• One of 4 contract forms sanctioned by

government and used in power and

chemicals

• US$10bn Programme to upgrade South

Africa’s ports and railways

• Client Transnet’s teams partner with

team from Hatch, Mott MacDonald and

Goba

• ECC3 and PSC3 used

• Use in Botswana and Sudan

• Interest in Ethiopia


North AfricaShell Environmental Clean Up

• Value: € millions

• Contracts: ECC Option D

• 2008 - 1010

• Contractor: Bilfinger Berger

Environmental (Germany)

• Project Manager: Shell Global Solutions

• Training – by NEC

• Richard Patterson


New Zealand & Australia

• used successfully by

Meridian Energy in NZ

– which now uses NEC

for all procurement

• many others following

– Watercare, Auckland

- Auckland airport

with Mott MacDonald

- Christchuch rebuild

March 2015

April 2019


Middle East

• Abu Dhabi• Aldar + Laing

O’Rourke• Al Raha Beach• US $10 bn

• Dubai• Jumeirah Golf

Estates

Stalled due to

economic crisis

March 2015:Interest in UK

NEC D&B Frameworks in

Oman government


India: Indira Gandhi International Airport, Terminal 3, Delhi

• Value: $1 billion

• Contracts: ECC, PSC, TSC

• 2006-2012

• Employer: Delhi International Airport (P) Ltd

• Contractor: Larson & Toubro

• Project Manager: GMR Group

Europe – International Criminal Courtat the Hague, Netherlands

• €147 million

• ECC option C

• Oct 2012 – Oct 2015

• Employer: International Criminal Court

• Contractor: Visser & Smit Bouwand Boele & van Eesteren(Courtys)

• Project Manager: Brink Groep

63



Canada & US

• One contract for UK client in NYC 2017

• Mott MacDonald’s Richard Patterson

delivered training for NEC Training

• Fragmented by states and provinces

• Little use of standard forms: Clients use

their own

• Law and lawyers rule!

• But…in discussion with MM US/Canada

• Interest in ‘Early Contractor

Involvement’ (ECI) or (in the US)

‘CM/GC’

• NEC would be ideal


https://www.neccontract.com/About-NEC/News-

Media/NEC-procured-Lima-2019-venues-ready-

for-games

Peru – first use of NEC –

facilities for Pam America and

Panapan American Games,

2019


The IFIs

The IFIs have been using

FIDIC for years.

‘MDB Harmonised Edition

of the FIDIC Red Book,

March 2006’ – the ‘Pink’

Book

Have endorsed FIDIC 2017

NEC will be a significant

change


The IFIs and NEC

• NEC is in discussion with at least EBRD /

World Bank / ADB / EDRD

• EIB already allows use of ‘internationally

recognised forms’

• New draft ‘Harmonised Bidding

Document of ADB explicitly allows use of

NEC

• ADB trailing NEC in Nepal

• ADB paid NEC to develop NEC for DBO

• Mott MacDonald helped

• (This was before the NEC4 contract

for DBO)

• Where next?

But the Banks

are all

endorsing

FIDIC 2017





• Mott MacDonald

expertise

Plan

Mott MacDonald

• One of the world’s largest management, engineering and development consultancies

• Employee owned

• > £1 billion turnover

• 17 000 staff in 200 offices across 6 continents

14/10/2019 Mott MacDonald | Market Presentation 2017 70

Principal offices and staff

2130North America

60South America

7920Europe

800Africa

2040Asia Subcontinent

1420Middle East

480Australasia

1150Asia Pacific

Buildings Communications Power Education Environment Industry

International development

Transport Urbandevelopment

Health Oil and gas Water

71

We open opportunities

with connected thinking.


• Mott MacDonald has been using NEC since early 90s

• NEC Users Group member 004 of 500+

• Training provided internally for thousands of staff and also for many clients

• NEC methodologies developed and shared through network and intranet

• Experience of most NEC contracts and options

• Building, Roads, Water, Power, Education etc

• UK, South Africa, Antarctica, Dubai, Hong Kong

Mott MacDonald NEC Expertise


• NEC track record and systems since early 1990s – experience around the group

• Experienced NEC specialists and trainers in NEC Contracts Advisory Team

What we have on NEC


What we have on NEC

• Richard Patterson• worked for Thomas Telford (TT) in 2007 on global

business development and training• part of NEC4 drafting team• Gives NEC Training’s 4 day ECC PM accreditation course• helped develop MM business in NEC in Hong Kong• Extensive publications on all things NEC• has trained on NEC in UK, Australia, NZ, Germany,

France, Ethiopia, USA

• Mark Anders• Commercial QS with years of NEC experience• Accepted by NEC to deliver training for NEC training

• Petter Siljehag• Extensive NEC experience as ECC PM and Supervisor

14/10/2019

Mott MacDonald | Prep of tender docs

76

Year Title Where published

2018NEC contracts – use them anywhere for any industry! - including how NEC covers

PMI's ideas on procurement and project management

IACCM's Contracting Excellence Journal, 18 June 2018

2018Design of Equipment in the ECC NEC Newsletter, 91, May 2018

2018NEC3 to NEC4 – evolution, not revolution; some fixes and some good ideas! In-procurement Magazine JanFeb 2018

2018NEC3 to NEC4 – evolution, not revolution; some fixes and some good ideas! ICE's Management Procurement and Law, December 2017 and on NEC website

from 26 Feb 2018

2018NEC Contracts - are they right for you? IACCM Contracting Excellence Journal, Feb 2018

2017NEC Engineering and Construction Contract (ECC): the necessary interaction

between the Supervisor and the Project Manager

Construction Law Quarterly / NEC website

2017NEC3 to NEC4 – evolution, not revolution; some fixes and some good ideas! Linked-in

2017When is task not a Task - in the NEC TSC contract NEC Newsletter Sep 2017, NEC website

2017NEC: how to require something is done by a certain date NEC Newsletter No 86, July 2017, NEC website

2017Mutual Trust and Co-operation – Walk the Line (10.1) Linked-in

2017New NEC4 Design, Build and Operate Contract NEC website

Some of our NEC articles, papers and books

14/10/2019


77

Year Title Where published

2016How to procure a series of work packages using NEC NEC website

2016NEC contracts are ideal to support project management as set out in the PMI’s ‘Project

Management Body of Knowledge’ (PMBOK®)

Linked-in

2016Submission of deliverables under the PSC NEC Newsletter No 80, September 2016

2016Enforcement Clauses and Links in the ECC NEC Newsletter No 79, July 2016

2016Can we use the NEC as the basis for a standard international PPP contract? ACE's email newsletter, Infrastructure Intelligence

2016NEC contracts - good for hydropower? NEC Newsletter No 76, January 2016

2015NEC contracts - good for hydropower? Proceedings Hydro 2015, Bordeaux

2015Using NEC to incentivise

lowest whole-life cost

NEC Newsletter No 75, November 2015

2015NEC3 Compared and Contrasted, Second Edition - chapter on NEC vs IChemE

contracts

ICE publishing

2015NEC3 - the Role of the Supervisor ICE publishing

2015NEC for design build finance and operate (DBFO) contracts – taking best practice

procurement into PPPs

ICE’s Management, Procurement and Law, November 2015, and winner of the

Parkman medal for best MPL paper, 2015

2015NEC contracts and the CDM Regulations 2015 ICE’s Management, Procurement and Law, 168, June 2015

2015NEC contracts tick IACCM’s ‘top ten’ box NEC website

2015Making the most of your early warnings – sorting out your TQs and RFIs…. and what

about the opportunities?

NEC website

2015NEC contracts and the Construction (Design and Management) Regulations 2015 NEC website

2015NEC contracts and the CDM Regulations 2015 NEC Newsletter No 72, May 2015

2014Getting your project set

up for ECC

NEC Newsletter No 70, January 2015 (published December 2014)

2014Working with NEC Contracts (in landscape architecture) Landscape (Magazine of the Landscape Institute,. Winter 2014

Some of our NEC articles, papers and books

14/10/2019


78

Some of our NEC articles, papers and booksYear Title Where published

2014ECC Works Information provided by the Contractor - who takes the risk? NEC Newsletter No 69, October 2014

2014Understanding expenses

in a PSC

NEC Newsletter No 67, July 2014

2014The importance of quality works information and site information in ECC projects NEC Newsletter No 66, April 2014

2013NEC for DBO Proceedings of the ICE - Management, Procurement and Law, Volume 166,

Issue 5, May 2013

2013How to prepare the Scope for an NEC PSC Contract By NEC as part of NEC April 2013

2012Managing Reality - the ECC Manuals ICE publishing

2012NEC3: A User's Guide ICE publishing

2011NEC3: contracts for partnering NEC Newsletter No 56, October 2011

2010Ground Conditions and Risk Allocation: Combining the NEC Engineering and

Construction Contract (ECC) and the Geotechnical Baseline Report (GBR)

Tunnels and Tunnelling Magazine, Dec 2010

20106 key links in the ECC NEC Newsletter No 51, July 2010

2010NEC contracts as an enabler to Partnering May 2010 edition of 'The Partner', which is ‘the annual publication of PSL, which is a

CBI and BIS initiative to promote collaborative business relationships

www.pslcbi.com '

2009Using NEC contracts to manage risk and avoid disputes Proceedings of the ICE - Management, Procurement and Law, 2009, No 4.

2009Use of NEC in legal jurisdictions other than English law NEC Newsletter, No,47, July 2009

2009NEC – A real opportunity for the Clerk of Works Site Recorder, Magazine of the Institute of Clerks of Works

2007NEC and Risk Management NEC Newsletter No 40, Oct 2007

2005NEC Managing Reality: Introduction to the Engineering and Construction

Contract. 5 volumes

ICE publishing

2007Dealing with

contingencies - what happened to the 'Provisional Sum'

NEC Newsletter No 40, Oct 2007

2007NEC3 key dates – more risk on the contractor NEC Newsletter No 40, Oct 2007

2001Using NEC for multiple site, undefined contracts ICE’s ‘Civil Engineering’, May 2001

2000NEC and PFI first for Leeds Heathcare NEC Newsletter No 14, July 2000


• How to write the PSC Scope

• Richard Patterson, Barry Trebes, Jerry Dixon (Mott MacDonald)

• ICE publishing

• NEC Compared and contrasted, 2nd

Edition

• Chapter comparing NEC and IChemEcontracts

• Richard Patterson, Barry Trebes, (Mott MacDonald)

• ICE publishing


NEC Contracts – Talk on Yammer

> 1000

members

14/10/2019 (c) Mott MacDonald 2018 | NEC001 81

NEC Bitesize 2019

https://mottmac.sharepoint.co

m/legal/industryforms/nec/Pag

es/necsessions.aspx22 January: NEC contracts - an introduction - why are they different? NEC0001

13 February: NEC - Introduction to the NEC Professional Services

Contract (PSC) - pre-award

NEC0020

14 March: NEC - Introduction to the NEC Professional Services

Contract (PSC) - contract management

NEC0021

8 April: NEC Engineering and Construction Contract (ECC) -

Contract Strategy (Main & Secondary Clauses)

NEC0003

14 May: NEC Engineering and Construction Contract (ECC) -

preparing the tender documents; tender evaluation

NEC0004

5 June: NEC ECC and temporary works NEC0028

26 June: NEC Contracts - Programmes under ECC and PSC NEC0005

25 July: NEC Contracts - The Risk Register and risk allocation and

management

NEC0006

23 September: NEC Engineering and Construction Contract (ECC) - early

warning and compensation events

NEC0007

22 October: NEC Engineering and Construction Contract (ECC) -the

Supervisor's roles & responsibilities

NEC0008

13 November: NEC - ECC - Defined Cost, the Contractor's system and

auditing

NEC0009

5 December: NEC and BIM (Building Information Modelling) NEC0026


NEC contracts advisory

team

• www.neccontract.com

• www.mottmac.com

• [email protected]



• Richard Patterson:

• + 44 (0) 7903 359 699

In Hong Kong


http://www.neccontract.com/

http://www.mottmac.com/

mailto:[email protected]





83

Flexibility



NEC’s core principles – why is it different?

14/10/2019

Thank you

Back up slides


• Same principles

• Same processes

• Same structure

• Same language

Family


NEC forms of contract

• Engineering and Construction Contract (ECC) • Engineering and Construction Subcontract (ECS)• Engineering and Construction Short Contract

(ECSC)• Engineering and Construction Short Subcontract

(ECSS)• Professional Services Contract (PSC)• Professional Service Short Contract (PSSC)

(April 2013)• Term Service Contract (TSC) • Term Service Short Contract (TSSC)• Framework Contract• Supply Contract• Supply Short Contract• The Adjudicators Contract

Also NEC Procurement and

Contract Strategies guide at

www.neccontract.com

(Note: Each with Guidance Notes and Flow Charts)



Capability Statement


We know about this stuff

Barry

Trebes

Richard

Patterson

Compared with FIDIC

NEC contracts


NEC Procurement and Contract Strategies

• NEC Procurement and Contract Strategies

– excellent concise guide to NEC3 contracts in different procurement and contract strategies (20 pages)

– free at www . neccontract . com

– go to ‘downloads’


additional conditions

jurisdiction-specific

options

secondary options

dispute resolution option

payment option

core clauses

A B C D E F

X1

X2

X3

X4

X5

X6

X7

X1

2

X1

3

X1

4

X1

5

X1

6

X1

7

X1

8

X2

0

W1 W2

Z

1 - 9

W2

Y(UK)2 Y(UK)3Y(UK)1Flexibility – The ECC

93


Main (payment) Options

93

Activity schedule Bill of quantities Reimbursable

Priced

Contract

Target

Contract

Cost

Reimbursable

Management

Contract

A

C

B

D

E

FOptions also in

Professional Services

Contract (PSC)

94


Main Options – Estimating and efficiency risks

94

95


The ‘Contractor’s’ share

95

96


ECC Contract Documents

96

www.neccontract.com

Mott MacDonald NEC Contract Advisory Services

www.mottmac.com

[email protected]

+44 (0) 1223 463 606


Further Information



Thank you

Selected publications relating to NEC prepared by Mott MacDonald and othersPrepared by Richard Patterson, Mott MacDonald, May 2019For Mott MacDonald staff, this file is here: http://pims01/pims/llisapi.dll/properties/1494775469General NEC articles are highlighted in Blue

Year Title About Book/Paper/Article Author Organisation Where published Web address (you need to joing 'My NEC' at www,neccontract.com toaccess the NEC Newsletters)

2019 Links between key NEC processes NEC Article Richard Patterson Mott MacDonald NEC Newsletter, May 2019 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2018 Building time-related charges into NEC lump-sum andshort contracts

NEC Article Richard Patterson Mott MacDonald NEC Newsletter, November 2018 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2018 NEC Early warnings - the need for education NEC Article Daniel Tempest Mott MacDonaldBentley

NEC Newsletter, November 2018 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2018 Using CIC BIM Protocol with NEC4 contracts NEC Article Peter Higgins NEC NEC Newsletter, July 2018 http://www.neccontract.com/news/index.asp?Type=Newsletters#2018 NEC contracts – use them anywhere for any industry! -

including how NEC covers PMI's ideas onprocurement and project management

NEC Article Richard Patterson Mott MacDonald IACCM's Contracting Excellence Journal, 18 June 2018 https://journal.iaccm.com/contracting-excellence-journal/nec-contracts-use-them-anywhere-for-any-industry

2018 Insurance - what every ECC PM should know ECC Article David Hunter Daniel ContractManagement Services

NEC Newsletter, 91, May 2018 https://www.neccontract.com/About-NEC/News-Media/Insurance-what-every-ECC-PM-should-know

2018 Design of Equipment in the ECC ECC Article Richard Pattersonand Rob Horne

Mott MacDonald,Osbourne Clark LLP

NEC Newsletter, 91, May 2018 https://www.neccontract.com/About-NEC/News-Media/Design-of-equipment-in-the-ECC

2018 NEC3 to NEC4 – evolution, not revolution; some fixesand some good ideas!

NEC Article Richard Patterson Mott MacDonald In-procurement Magazine JanFeb 2018 https://drive.in-tend.co.uk/index.php/s/CcSf6GEKumSSLhZ

2018 NEC3 to NEC4 – evolution, not revolution; some fixesand some good ideas!

NEC Article Richard Patterson Mott MacDonald ICE's Management Procurement and Law,December 2017 and on NEC website from 26 Feb2018

https://www.neccontract.com/About-NEC/News-Media/NEC3-to-NEC4-evolution-not-revolution-some-fix

2018 NEC Contracts - are they right for you? NEC Article Richard Patterson Mott MacDonald IACCM Contracting Excellence Journal, Feb 2018 https://journal.iaccm.com/contracting-excellence-journal/nec-contracts-are-they-right-for-you

2017 NEC Engineering and Construction Contract (ECC):the necessary interaction between the Supervisor andthe Project Manager

ECC Paper Richard Patterson Mott MacDonald Construction Law Quarterly / NEC website Free at: https://www.neccontract.com/The-interaction-between-the-Supervisor-PMhttp://www.icevirtuallibrary.com/doi/10.1680/jmapl.2017.170.5.221

2017 When is task not a Task - in the NEC TSC contract TSC Article Richard Patterson Mott MacDonald NEC Newsletter Sep 2017, NEC website https://www.linkedin.com/pulse/nec-tsc-when-task-richard-patterson

2017 NEC: how to require something is done by a certaindate

ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 86, July 2017, NEC website https://www.neccontract.com/NEC/media/NEC/My%20NEC%20Downloads/Newsletters/NEC-Newsletter-86-WEB.pdf

2017 Mutual Trust and Co-operation – Walk the Line (10.1) NEC Article Neil Earnshaw neconsultant Linked-in https://www.linkedin.com/groups/2893228/2893228-62636527472797696012017 New NEC4 Design, Build and Operate Contract DBO Article Ross Hayes, Richard

Patterson and BarryTrebes

Mott MacDonald NEC website https://www.neccontract.com/About-NEC/News-Media/New-NEC4-Design-Build-and-Operate-Contract

2016 How to procure a series of work packages using NEC NEC Article Richard Patterson Mott MacDonald NEC website https://www.neccontract.com/About-NEC/News-Media/How-to-procure-a-series-of-work-packages-using-NEC

2016 NEC contracts are ideal to support projectmanagement as set out in the PMI’s ‘ProjectManagement Body of Knowledge’ (PMBOK®)

NEC Article Richard Patterson Mott MacDonald Linked-in https://www.linkedin.com/today/post/article/nec-contracts-ideal-support-project-management-set-out-patterson?trk=prof-post

2016 Submission of deliverables under the PSC PSC Article Richard Patterson Mott MacDonald NEC Newsletter No 80, September 2016 https://www.neccontract.com/About-NEC/News-Media/Submission-of-‘deliverables-under-the-PSC

http://www.neccontract.com/news/index.asp?Type=Newsletters#2016 Enforcement Clauses and Links in the ECC ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 79, July 2016 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2016 The NEC Definitely, Maybe…? - NEC Case Law NEC Article Rob Horne Simmons and Simmons Simmons and Simmons website http://www.elexica.com/-/media/files/training/2016/07%20july/simmons%20%20simmons%20%20the%20nec%20definitely%20maybe.pdf

List of NEC Articles by Mott MacDonald and Others - May 2019 1 of 4



2016 Can we use the NEC as the basis for a standardinternational PPP contract?

NEC Article Richard Patterson,Barry Trebes

Mott MacDonald ACE's email newsletter, Infrastructure Intelligence http://www.infrastructure-intelligence.com/article/jan-2016/can-we-use-nec-basis-standard-international-ppp-contract?utm_medium=email&utm_source=transactional&utm_campaign=weekly-email

https://www.mottmac.com/views/can-we-use-the-nec-as-the-basis-for-a-standard-international-ppp-contract

2016 NEC contracts - good for hydropower? NEC Article Richard Patterson,Warwick Fergusson

Mott MacDonald,Transpower, NZ

NEC Newsletter No 76, January 2016 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2015 NEC contracts - good for hydropower? NEC Paper Richard Patterson,Warwick Fergusson

Mott MacDonald,Transpower, NZ

Proceedings Hydro 2015, Bordeaux Paper:https://www.neccontract.com/NEC/media/NEC/document%20downloads/HYDRO-2015-NEC-contracts-good-for-hydropower-R-Patterson-Mott-MacDonald-W-Fergusson-Transpower-NZ-26-10-2015.pdf ;Presentation:https://www.neccontract.com/NEC/media/NEC/document%20downloads/NEC3-contracts-good-for-hydropower-Hydro-2015-R-Patterson-Mott-MacDonald-26-10-2015.pdf

2015 Using NEC to incentiviselowest whole-life cost

ECC Article Richard Patterson,Barry Trebes

Mott MacDonald NEC Newsletter No 75, November 2015 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2015 NEC3 Compared and Contrasted, Second Edition -chapter on NEC vs IChemE contracts

NEC Book Richard Patterson,Barry Trebes

Mott MacDonald ICE publishing https://www.neccontract.com/Products/Books/NEC3-Compared-and-Contrasted-2nd-edition

e-book: http://www.icevirtuallibrary.com/doi/full/10.1680/neccac.57654.0372015 NEC3 - the Role of the Supervisor ECC Book Barry Trebes (with

Bronwyn Mitchell)Mott MacDonald ICE publishing https://www.thomastelford.com/books/bookshop_main.asp?ISBN=97807277609

68%20&BookTitle=NEC3:%20The%20Role%20of%20the%20Supervisor2015 NEC for design build finance and operate (DBFO)

contracts – taking best practice procurement intoPPPs

NEC Paper Richard Patterson,Barry Trebes

Mott MacDonald ICE’s Management, Procurement and Law,November 2015, and winner of the Parkman medalfor best MPL paper, 2015

Winner of the ICE's Parkman Medal for best paper in ICE's Management,Procurement and Law, 2015 and so FREE athttp://www.icevirtuallibrary.com/doi/full/10.1680/jmapl.15.00001

2015 NEC contracts and the CDM Regulations 2015 NEC Paper Richard Patterson,Marke Davies, BarryTrebes

NEC (Mott MacDonald) ICE’s Management, Procurement and Law, 168,June 2015

http://www.icevirtuallibrary.com/doi/full/10.1680/mpal.1500009

2015 NEC contracts tick IACCM’s ‘top ten’ box NEC Article Richard Patterson Mott MacDonald NEC website https://www.neccontract.com/NEC/media/NEC/My%20NEC%20Downloads/Other/IACCM-top-ten-and-NEC.pdf

2015 Making the most of your early warnings – sorting outyour TQs and RFIs…. and what about theopportunities?

ECC Article (NECGuidance)

Richard Patterson,Barry Trebes

Mott MacDonald NEC websitehttps://www.neccontract.com/NEC/media/NEC/My%20NEC%20Downloads/Articles/Early-Warnings-article.pdf

2015 NEC contracts and the Construction (Design andManagement) Regulations 2015

NEC Article (NECGuidance)

Richard Patterson,Barry Trebes

Mott MacDonald NEC website https://www.neccontract.com/getmedia/2454bd32-fd50-49d1-8a70-ff256ff6b8b4/NEC-contracts-and-CDM-2015.pdf.aspx

2015 NEC contracts and the CDM Regulations 2015 NEC Article Richard Patterson,Mark Davies, BarryTrebes

NEC (Mott MacDonald) NEC Newsletter No 72, May 2015 https://www.neccontract.com/About-NEC/News-Media/CDM-2015-guidance-now-available

http://www.neccontract.com/news/index.asp?Type=Newsletters#2014 Getting your project set

up for ECCECC Article Richard Patterson,

Barry TrebesMott MacDonald NEC Newsletter No 70, January 2015 (published

December 2014)http://www.neccontract.com/news/index.asp?Type=Newsletters#

2014 Working with NEC Contracts (in landscapearchitecture)

NEC Article Richard Patterson,Noor Itrakjy andCollette Patterson

Mott MacDonald Landscape (Magazine of the Landscape Institute,.Winter 2014

http://www.landscapethejournal.org/Working-with-the-NEC-contracts




2014 ECC Works Information provided by the Contractor -who takes the risk?

ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 69, October 2014 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2014 Understanding expensesin a PSC

PSC Article Richard Patterson,Barry Trebes

Mott MacDonald NEC Newsletter No 67, July 2014 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2014 The importance of quality works information and siteinformation in ECC projects

ECC Article Richard Patterson,Barry Trebes

Mott MacDonald NEC Newsletter No 66, April 2014 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2013 Projecting Best Practice - NEC in Hong Kong NEC Article Richard Patterson Mott MacDonald Nec Civil Engineer Online Available from Richard Patterson2013 NEC for DBO DBO Paper Richard Patterson,

Barry TrebesMott MacDonald Proceedings of the ICE - Management,

Procurement and Law, Volume 166, Issue 5, May2013

http://www.icevirtuallibrary.com/content/article/10.1680/mpal.12.00020

2013 How to prepare the Scope for an NEC PSC Contract PSC Book Richard Patterson,Barry Trebes, JerryDixon

Mott MacDonald By NEC as part of NEC April 2013 http://www.neccontract.com/contracts/NEC3Paperboundcontracts_price_list.asp?whichpage=6

2012 Managing Reality - the ECC Manuals NEC Book Barry Trebes (withBronwyn Mitchell)

Mott MacDonald ICE publishing http://www.neccontract.com/products/bookshop_main.asp?ISBN=9780727757166&NEC=True&UK4ITJTV63YD2CH5XUFYH=

2012 NEC3: A User's Guide NEC Book Jon Broome leading edge projectsconsulting, UK

ICE publishing http://www.neccontract.com/products/books.asp

2012 Is Hong Kong Ready For The NEC? NEC Article Keith Keown MTR (Hong Kong) A paper given to members ofThe Society of Construction Law Hong Kongin Hong Kong on 15th March 2012and 1st Prize Winner of the SCLHK Prize 2011

http://www.scl.hk/

2013 Intelligently setting the Contractor’s sharepercentages and share ranges under the target cost

ECC Article Jon Broome leading edge projectsconsulting ltd

Article posted by Jon Broome on his website www.leadingedgeprojects.co.uk

2011 NEC3: contracts for partnering NEC Article Richard Patterson Mott MacDonald NEC Newsletter No 56, October 2011 http://www.neccontract.com/news/index.asp?Type=Newsletters#2010 Ground Conditions and Risk Allocation: Combining

the NEC Engineering and Construction Contract(ECC) and the Geotechnical Baseline Report (GBR)

ECC Article Richard Patterson Mott MacDonald Tunnels and Tunnelling Magazine, Dec 2010 http://www.tunnelsonline.info or on request from Richard Patterson

2010 6 key links in the ECC ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 51, July 2010 http://www.neccontract.com/news/index.asp?Type=Newsletters#2010 Is there a hierarchy of documents under the ECC ? ECC Article Jon Broome Leading Edge NEC Newsletter http://www.neccontract.com/news/index.asp?Type=Newsletters#2010 NEC contracts as an enabler to Partnering NEC Article Richard Patterson Mott MacDonald May 2010 edition of 'The Partner', which is ‘the

annual publication of PSL, which is a CBI and BISinitiative to promote collaborative businessrelationships www.pslcbi.com '

See Linked-in Profilehttp://www.linkedin.com/profile?viewProfile=&key=46641250&trk=tab_pro

2010 Producing a programme under the NEC form ofcontract

ECC Paper Glenn Hide GMH Planning ICE’s Management, Procurement and Law,163(MP3)

http://www.gmhplanning.co.uk/publication

2011 Managing a programme under the NEC form ofcontract

ECC Paper Glenn Hide GMH Planning ICE’s Management, Procurement and Law,163(MP2)

http://www.gmhplanning.co.uk/publication

2009 Using NEC contracts to manage risk and avoiddisputes

ECC Paper Richard Patterson Mott MacDonald Proceedings of the ICE - Management,Procurement and Law, 2009, No 4.

See Linked-in Profilehttp://www.linkedin.com/profile?viewProfile=&key=46641250&trk=tab_pro

2009 Use of NEC in legal jurisdictions other than Englishlaw

NEC Article Richard Patterson Mott MacDonald NEC Newsletter, No,47, July 2009 http://www.neccontract.com/NEC/media/NEC/Newsletters/Patterson-on-NEC-outside-the-UK-in-NEC-Newsletter-Issue-47.pdf

2009 Some thoughts on NEC3 NEC Paper Humphrey Lloyd QC - NEC Special article http://www.neccontract.com/NEC/media/NEC/Newsletters/NEC-news-lloyd-special-web-version-2.pdf

2009 NEC – A real opportunity for the Clerk of Works ECC Article Richard Patterson Mott MacDonald Site Recorder, Magazine of the Institute of Clerks ofWorks

On request from Richard Patterson

2007 NEC and Risk Management ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 40, Oct 2007 http://www.neccontract.com/news/index.asp?Type=Newsletters#




2005 NEC Managing Reality: Introduction to theEngineering and Construction Contract. 5 volumes

NEC Book Bronwyn Mitchelland Barry Trebes(Mott MacDonald)

NEC ICE publishing http://www.neccontract.com/products/books.asp

2007 Dealing withcontingencies - what happened to the 'ProvisionalSum'

ECC Article Rob Gerrard NEC Newsletter No 40, Oct 2007 http://www.neccontract.com/news/index.asp?Type=Newsletters#

2007 NEC3 key dates – more risk on the contractor NEC Article Jon Broome NEC Newsletter No 40, Oct 2007 http://www.neccontract.com/news/index.asp?Type=Newsletters#2001 Using NEC for multiple site, undefined contracts NEC Paper Richard Patterson Mott MacDonald ICE’s ‘Civil Engineering’, May 2001 On request from [email protected] NEC and PFI first for Leeds Heathcare ECC Article Richard Patterson Mott MacDonald NEC Newsletter No 14, July 2000 http://www.neccontract.com/news/index.asp?Type=Newsletters#

Also discussion groups on Linked-inNEC Official Group https://www.linkedin.com/groups?home=&gid=3378841&trk=my_groups-tile-grpNEC Asia Pacific Official Group https://www.linkedin.com/groups?home=&gid=4817638&trk=my_groups-tile-grpNEC People – very active and useful discussion group https://www.linkedin.com/groups?home=&gid=2893228&trk=my_groups-tile-grp
