New Engineering Contract NEC

The NEC conditions of contract are made up of the following construction conditions:
The Engineering and Construction Contract (ECC)

      • Option A: Priced contract with activity schedule
      • Option B: Priced contract with bill of quantities
      • Option C: Target contract with activity schedule
      • Option D: Target contract with bill of quantities
      • Option E: Cost reimbursable contract
      • Option F: Management contract
    • The Engineering and Construction Short Contract

 

  • The Engineering and Construction Subcontract Contract

The primary differences between the options of the ECC are the mechanisms by which the contractor is reimbursed and encouraged to be cost effective. Therefore clauses that seek to remove barriers, and positively encourage the use of recycled and secondary aggregates, could be different in each case.

The guidance and example contract clauses will focus on ECC Options A, B and C. These options provide a framework to demonstrate how tender and contract clauses that encourage the use of recycled and secondary aggregates, can be integrated with the NEC conditions of contract.

Whilst the other options are not specifically considered, the guidance and example contract clauses set out below may still be drawn upon, to encourage the use of recycled and secondary aggregates.

As for the Engineering and Construction Short Contract and the Engineering and Construction Subcontract Contract, the flexibility of the NEC is such that any of options A to F can be incorporated as the drafter of the tender wishes.

More information on the original site itself: http://aggregain.wrap.org.uk/procurement/how_to_procure/model_clauses/nec_contracts/

 

The developer of the NEC the Institution of Civil Engineers UK   http://www.ice.org.uk/topics/lawandcontracts/NEC-and-ICE-contracts

 

Other site http://www.neccontract.com/

Comparison between FIDIC and NEC

(from http://en.allexperts.com/q/Construction-Law-914/2009/10/FIDIC-vs-NEC.htm accessed 14/11/11 )

Please read carefully from Mr. Agne Sandberg’s (Head of Legal Services) statements as follows,

5. COMPARISON BETWEEN THE SILVER BOOK AND THE ENAA MODEL FORM ON SOME ISSUES OF
PRINCIPLE INTEREST
I have chosen to look closer at certain matters of particular interest for turnkey contracts. These are;
Responsibility for errors in information provided by the Employer;
• Responsibility for errors in the Employer’s Requirements;
• Interference by the Employer in the performance by the Contractor;
Already at this stage I would like to point out that the issues chosen are not matters of allocation risk for events beyond the
Control of the Parties. If you would consider also the above issues to be matters of risk allocation, it is risks within the control of one
Of the parties I„e„ the Employer, to place that risk on the Contractor obviously contradicts the principle that the party that best
Can control a risk should carry it.
5.1 Responsibility for errors in information provided by the Employer. The Silver Book
It is obviously intended that the Employer shall not be responsible for errors or other incorrectness in information provided by him
To the Contractor,.
Sub-Clause 4.10 – Site Data
“The Employer shall have made available to the Contractor for his information, prior to the Base Date, all relevant data in the
Employer’s possession on hydrological and sub-surface conditions at the Site, including environmental aspects. The
Contractor shall be responsible for verifying and interpreting all such data,”
Sub-Clause 5.1 – General Design Obligations;
The Employer ………………………. shall not be deemed to have given any representation of accuracy or completeness of any
Information. Any information received by the Contractor, from the Employer or otherwise, shall not relieve the Contractor f om
his responsibility for the design of the Works,”
By Sub-Clause 4.12 it is confirmed that the Contractor will have to bear the consequences of incorrectness in the information
provided by the Employer, as the Contractor is deemed to have obtained all necessary information and to have foreseen all
difficulties.
Sub-Clause 4.12 – Unforeseeable Difficulties;
“The Contractor shall be deemed to have obtained all necessary information as to risks, contingencies and other
circumstances which may influence or affect the Works.. By signing the Contract, the Contractor accepts responsibility for
having foreseen all difficulties and costs of successfully completing the Works, The Contract Price shall not be adjusted to
take account of any unforeseen difficulties or costs, except as otherwise stated in the Contract,”
4
In other words, unless otherwise stated in Part II – Conditions of Particular Application, all data and information provided by
the Employer is used by the Contractor on his own risk..
ENAA Model Form
The Owner is responsible for the information to be provided by him during the course of the Contract. GC 10.1 – Owner’s
Responsibilities;
“The Owner shall ensure the correctness and exactitude of all information and/or data to be supplied by the Owner as described
in Appendix 9-3 (Scope of Works and Supply by the Owner) except when otherwise expressly stated in the Contract,”
It is also clear that the Owner is responsible for information submitted prior to signing Contract.
GC 20.1.1 – Specifications and Drawings;
“The Contractor shall be responsible for any discrepancies, errors or omissions in the specifications, drawings and other technical
documents prepared by it, whether such specifications, drawings and other documents have been approved by the Owner or
not, provided that such discrepancies, errors or omissions are not due to inaccurate information furnished in writing to the
Contractor by or on behalf of the Owner.”
The ENAA Model Form provides that the Contractor shall make a reasonable examination of information provided by the Owner, a
reasonable site investigation and examination of other data available.
GC 9.2 – Contractor’s Responsibilities;
“The Contractor confirms that it has entered into this Contract on the basis of a reasonable examination of the data relating
to the Works (including any data as to boring tests) provided by the Owner and of information which it could have
obtained from a visual inspection of the Site (if access thereto was available) and of other data readily available to it relating
to the Works as on the date of the Agreement”
Comments
Obviously the two conditions of contract have two opposite principles as concerns the Employer’s responsibility for
information provided by him. The ENAA Model Form has fully adopted the basic principle that normally applies for contracts, i.e.
that a party is responsible for that information provided by him is correct.. The Silver Book does not even have an option for the
situation where the Employer shall be responsible for certain information provided by him.
In larger contracts the Contractor can not obtain certain fundamental information or data from any other source than the Employer.
Consequently he should then not be held responsible if’ such information is incorrect.. The location of the Site, physical limits of
the Works, interfaces and for particular types of projects e.g.. quality of the fuel for a thermal power plant or water flow and
net head for a hydro power project, are certainly information that must be provided by the Employer and that he must retain
responsibility for.
For the purpose of this discussion, I consider that the Silver Book standpoint never can fully apply in any proper contract.
Even in the most pure BOT situation certain basic facts connected to the commercial foundation of the project can not be offloaded
to the turnkey contractor. In my opinion, not even in the situation where the Contractor also is shareholder in the
concession company. The wording of the Silver Book will therefore not apply to its full extent.. Also considering this, the
burden put on the Contractor is of course very heavy. The Contractor will as the collector and responsible for all information of
importance for execution of the Works have a knowledge of the project that the Employer will not have. This will be of
importance for the discussion on the Employer interference below..
5.2 Responsibility for errors in the Employer’s Requirements The
Silver Book
The form of tender normally states that the tenderer has based his tender on the documents included in invitation. The
Letter of Tender included in the Silver Book contain a statement that the tender has ascertained that the Conditions of
Contract, Employer’s Requirements do not contain any errors or other defects.
5
The conditions of contract shifts virtually all responsibility for the Employer’s Requirements to the Contractor. Sub-Clause
5.1 states that;
“The Contractor shall be responsible for the design of the Works and for the accuracy and completeness of the Employer’s
Requirements…”
and that
“The Employer shall not be responsible for any error, inaccuracy or omission of any kind in the Employer’s Requirements, and
shall not be deemed to have given any representation of accuracy or completeness of any information”
This does not sit well with the definition in Sub-Clause 1.1.1.3 which states that;
“the Employer’s Requirements” is the specification of the purpose, scope, and/or design and/or other technical
criteria.
and therefore the conditions does take a step back later in Sub-Clause 5.1 by providing that;
“However, the Employer shall be responsible for the correctness of the following portions of the Employer’s
Requirements:
(a) definition of intended purposes for the Works or any parts thereof,(b) criteria for testing/performance of
completed Works, and
(c) any other portions which are stated as being the responsibility of the Employer.”
ENAA Model Form
The Contractor shall perform the works in accordance with the Technical Specifications.

From this above comparison, I will be sure you will get good ideas. If, you need Mr. Agne Sandberg’s full comparison means, please send to me your personal email id. I will forward immediately. I think my answer will get full satisfaction to you. If, you fully satisfied please quote full mark to me.

 

Good resource on construction law in austrlia

http://www.mtecc.com.au/resources/publications-papers

Good write up on FIDIC                 http://www.mtecc.com.au/uploads//papers/Shnookal,_Toby.pdf

 

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