NEC4 – Two blokes walk into a bar…
PART ONE
The Engineers’ Arms is a regular place for construction and engineering people to meet and enjoy the odd liquid compensation event. Pete is a Project Manager, and has just finished his third power station extension, expansion, and upgrade project. Today he is having a drink with Dudley, the Contractor who has just completed the projects at Fair Isle power station. The following conversation ensues:
Dud: What are you having, Pete?
Pete: A pint of Vicar’s Tipple and some pork scratchings, please.
Barman: The usual then? I will bring that over times two.
Pete: So, how is life then Dud? It’s a few weeks since handover of the FGD building, three out of three without a dispute.
Dud: That was a good project for you too, Pete, three out of three on time and on budget. So what’s next?
Pete: Well, we are in the very early stages of looking at re-boilering the first phase, with some new condensing boiler plant, to keep the power flowing we will build a new boiler hall to feed to the existing turbine hall, and use the space for later projects to increase capacity.
Dud: Excellent idea that, when do we start?
Pete: As you know we have a tender process, and you can apply from next week. We are looking for some innovation this time around, some early contractor involvement, and a two-stage tender. Come up with a good presentation, and if you make it through we can negotiate the target!
Dud: I do love a limited competition bid, and with our track record here, we have to be in with a good chance. Why don’t you just give us the job, Pete?
Pete: We play by the rules, Dud, you know that. Put your best bid in and see how it goes.
Dud: So, what form of contract are you going to use?
Pete: You know the answer to that too: NEC3 Option C - with a few of our own special amendments. Just like last time.
Dud: And the time before that. You may not have heard but NEC4 is out now Pete, it’s time to upgrade! There are some great new features, and the drafting has been adjusted to reflect everything learned over the last 12 years since NEC3 was first published.
Pete: Hang on, hang on, nobody said anything about changing the form of contract!
Dud: But it’s the latest thing, cutting edge, and just published in June. Surely you want to try it?
Pete: We have been using NEC3 for 10 years, and it has served us well. You know that our last series of projects were all delivered without dispute, on time, and on budget. All of our staff are trained on NEC3, we have our own amendments which have been tested on live projects and who wants to spend money on changing everything? It works, and it isn’t broken, so I don’t plan to mend it!
Dud: But it’s new, you won’t even try it?
Pete: If you can give me ONE good reason to change our practice from NEC3 to NEC4, I will consider it.
Dud: OK, how about…
This type of conversation could well be taking place in bars across the country right now. What would you say to Pete about changing to NEC4? Please comment below with the ONE reason you would give.
Demystifying construction contracts. Construction Law specialist in NEC3, FIDIC, JBCC and GCC.
7 年Hi Mark - very interesting article. I am involved in giving training on the NEC4 contract in South Africa. I find that the main progressive additions i.e. ECI and BIM might not be used in South Africa until such time as our market becomes more sophisticated. Most of our Employers/Clients are comfortable with NEC3 and might take some time to change to NEC4. In my opinion I see that the Employers/Clients will simply adopt the additions / alterations that they like from NEC4 into NEC3 via Z clauses. For instance the deemed acceptance of the contract programme or the change to the Early Warning Register and then they will proceed with the standard NEC3. However to answer your question, the reasons I would suggest Employers / Clients change to NEC4 are for the improved dispute resolution procedures. The amendment to W1 and the introduction of W3 would be very useful in the current litigious climate we are facing in South Africa.