From June 2017 the NEC suite of frameworks added a new update — NEC4. Those working in, or looking at getting into nuclear will be well aware that many of the current contracts being undertaken in the nuclear industry in the UK are under the NEC3 contract terms.
So a little on the history of NEC…
NEC was initially thought of in the 1980’s with the objectives of providing flexibility, clarity and simplicity and a means to provide good project management. With the 1st edition being introduced in 1993 following the success of a consultative initial version the contract has seen NEC2 introduced in 1995 and NEC 3 in 2005.
The latest edition added in 2017 being NEC4 has been introduced to include industry practice, has also made allowance for changes to law and has added two new editions to the suite such as an Alliance Contract and a Design Build & Operate Contract. It is though that the new NEC4 is being brought as competition to the popular FIDIC.
Although NEC3 will still be alive with the contracts and books being available formal support for NEC3 will not extend to any further inclusions for any upcoming changes in law. This is a real important point when considering that Brexit is around the corner.
This post will not go into too much detail with the changes apparent in NEC4 as we’ll leave this up to the experts! However, below is an overview of the headline topics for consideration.
We highly recommend getting yourself signed up for one of the many presentations, lecture and courses being arranged — we have details of one happening soon below if you are in the Manchester area.
Okay so what are some of the major changes?…
Well there are numerous changes to some of the terminology that you will be familiar with regards NEC3. For examples, the Employer is now the Client, the Works Information is now Scope, the Risk Register is the Early Warning Register (which needs to be produced by the PM within one week of the contract start date) and there is only one applicate fee percentage.
Additionally, the Guidance Notes have now been replaced with 4 volumes of User Guides being; Establishing a Procurement Contract Strategy, Preparing a Contract, Selecting a Supplier and Managing a Contract.
There are changes to the ‘W’ Dispute Resolution clauses with the introduction of Senior Representatives and mediation. Numerous ‘X’ have been added covering collateral warranties BIM, IPR, Whole Life Cost, Termination and Early Contractor Involvement. Additionally, there are new Compensation Events (CE’s) removing the need for many of the ‘Z’ clauses and contractor liabilities are expressly stated.
Although the UK Nuclear Industry continues to work under and award contracts under the NEC3 suite of contracts it is enevitable that these will be migrated over to the NEC4 contract — particularly for new contracts in any case. It will be interesting to see how the an upcoming changes in law; particularly those surrounding Brexit will be dealt with on existing contracts if not already dealt with in the contracts.