Email: davidhunter@danielcms.co.uk
We provide consultancy for clients, contractors, subcontractors and others who are planning to use an NEC contract or have already in engaged in a contract for works or services. We are flexible in our approach and provide customers what they need at the time the support is required. We can provide NEC Contract advice on a reactive ad-hoc basis, or work with you to develop a more defined scope of services with agreed outputs and deliverables.
Our services include:
In developing a strategy for procurement and selection of the appropriate NEC contract, we first work with clients to understand your motivation, needs and priorities. We use both quantitative models and qualitative appraisals to arrive at the best solution.
Working with you, we explore different procurement options, assessing risk and taking into account any lessons learnt from your previous projects. Procurement routes may include: traditional client design; contractor design and build; early contractor involvement; management contracting and construction management; alliancing and partnering models. The different forms within the NEC suite of contracts accommodate all of these procurement routes.
The NEC forms offer a wide range of strategies including: fixed price, target, and cost reimbursable contracts. The commercial arrangement within a contract has a relationship with the procurement strategy but both remain mutually independent. For example, a design and build contract can be let equally on a fixed price or cost reimbursable basis. Developing a contract strategy involves decisions on how risk is allocated between the parties and is primarily centred around cost and time. Other important matters to consider include: incentivisation, payment terms, liability and insurances.
The NEC contracts provide flexibility on the allocation of risk through its main and secondary options. We work with clients providing advice on the different options available in order that the contract strategy reflects the needs and priorities of the project and that an appropriate allocation of risk is chosen to achieve best value.
Our services often include drafting of Contract Data as part of preparation of the tender documents and implementing contract strategy. We also provide an independent checking service for Contract Data prepared by others.
The Contract Data defines the conditions of contract. It provides the information specific to the contract necessary for the parties to effectively operate and manage the contract. Preparation of the Contract Data should reflect the client’s contract strategy.
Contract Data is presented as a blank form comprising two parts which need to be filled in to make the contract effective. Part one is completed by the Client and part two by the Contractor. However, it should not be approached as a form filling exercise. The NEC forms state, “Completion of the data in full, according to the Options chosen is essential to create a complete contract.” Errors or omissions in Contract Data may lead to uncertainty between the parties and, ultimately, disputes.
The Contract Data includes: a brief description of the works; the parties’ names and addresses; starting and completion dates; delay damages; payment terms and other commercial information used for assessment of compensation events. It includes the data for the chosen main and secondary options. Contract Data also sets out any limitations on liability and the levels of insurance cover. The NEC4 forms now make provision for drafting additional compensation events as part of the Contract Data.
We are experienced in writing Scope/Works Information for the various NEC forms of contracts. Working with the client team and its project partners, we are able to prepare Scope which is compliant with the NEC conditions of contract and reduces the risk of inconsistencies and ambiguities arising, providing greater certainty of cost and programme.
The Scope (or Works Information for NEC3) is a contract document which specifies and describes the work to be performed by the contractor. The Scope is not limited to specifications and drawings but also includes any constraints as to how the contractor may carry out the work. For example, access and deliveries to site; working hours; noise and vibration; sharing working areas and co-ordination with others. Many aspects of the conditions of contract requires Scope to be drafted in order to make the contract effective. For example, responsibility for design; requirements for completion and quality management.
An incomplete Scope at tender stage will mean work is not priced by the contractor nor allowed for in its programme. A clearly written Scope which is consistent throughout, and with the other contract documents, is essential for a successful project. An incomplete Scope, inconsistencies and ambiguities are normally the client’s risk often leading to an increase in the price and time of a project. Whilst most disputes are about payment and extension of times both normally arise due to a poorly written Scope.
We are experienced in drafting Z clauses and contract amendments. We seek to ensure the clauses provide clarity for the parties and are consistent with the NEC terminology and standard conditions of contract. Our services also include reviewing Z clauses prepared by others and advising on how amendments may impact on risk and liability.
Z clauses are additional conditions of contract used to tailor the standard forms of NEC contracts to meet the specific needs of the client, contract strategy and risk allocation for a project. The use of Z clauses are an essential part of the flexibility of NEC contracts and can work successfully for both parties providing they do not result in an unjust or unfair agreement. Z clauses should not be written by inexperienced persons.
We are experienced in both public and private sector procurement. We are able to prepare the various tender and NEC contract documents necessary for inviting offers for works and services. This includes:
We provide advice to clients on which of the NEC4 forms are best suited for procuring the works and services required to deliver its projects. Frameworks are bi-party agreements between the purchaser and a supplier but it is not uncommon for a purchaser to have a number of similar agreements in place with multiple suppliers. The use of sole supplier frameworks such as SCAPE has increased in popularity. Sole supplier frameworks reduce the time and effort in the procurement process for each project and increase the opportunity to foster collaborative relationships.
We provide an independent and objective service, giving comfort to clients that the assessment and evaluation of tenders is performed in a fair and unbiased manner. Typically our services involve:
Assessment and evaluation of tenders is a crucial part of the process for selection and award of an NEC contract. Tenders will comprise technical, quality and commercial aspects that need to be assessed for compliance. A contractor’s tender may include qualifications or offer different contractual and commercial terms than those required by the client. It is important that both parties enter into the contract with a common understanding of the scope and risk. A check of the client’s proposed contract and the tenderer’s offer to ensure consistency is an important step in the pre-contract governance process to avoid contractual arguments arising during the delivery phase.
We have experience in preparing a number of agreements using the NEC Framework Contract (NEC FC). Our services include providing advice on how and when best to use the NEC FC. We also draft the various contract documents required for the Framework including:
A framework agreement is the umbrella under which contracts for works and services are commissioned. The NEC FC can be used to put in place a long term non-binding agreement with a Supplier and is suitable for a wide range of construction and engineering projects.
The NEC forms used with the NEC Framework Contract include the long and short form of the:
We provide advice to clients on which of the NEC4 forms are best suited for procuring the works and services required to deliver its projects.
Frameworks are bi-party agreements between the purchaser and a supplier but it is not uncommon for a purchaser to have a number of similar agreements in place with multiple suppliers. The use of sole supplier frameworks such as SCAPE has been increased in popularity. Sole supplier frameworks reduce the time and effort in the procurement process for each project and increase the opportunity to foster collaborative relationships.
We provide advice to clients on the appropriate use and application of ECI. Our services include preparing the relevant contract documents and procedures necessary for effective management of ECI.
Engaging early with suppliers has become an essential part of the procurement strategy for complex projects where multiple stakeholders and interfaces are involved. Early Contractor Involvement (ECI) is an effective form of risk management, providing an opportunity for client and contractor to work collaboratively in developing the design and agreeing the price and programme of a project.
Early contractor involvement is a secondary option (X22) available for use with the NEC4 Engineering and Construction Contract. The parties enter into a single contract to develop and agree the scope and prices before advancing to the construction stage. ECI can also be implemented under a separate pre-construction agreement using the Professional Service Contract.
Before commencing the design or construction phase of a project, it is important that all those with a part to play in operating and managing the contract are aware of its requirements and their own duties. Our pre-contract start-up workshops focus on the roles and responsibilities of the four main parties in an NEC contract namely; Client, Contractor, Project Manager and Supervisor. The workshops can be tailored to reflect the scope of the project and any Z clauses or amendments that have been made to the standard form of NEC contract.
A review of a contract is essential to ensure your legal and commercial interests are protected. Before entering into the contract, both parties should be fully aware of each other’s rights and obligations and share a common understanding of how risk is allocated under the contract.
We offer an independent review service of NEC contracts for Clients, Contractors, Subcontractors and Consultants at various stages of the procurement process including; tender, offer, selection and award. A contract review is, of course, best performed before entering into the agreement but can also be carried out during contract delivery in the event of a problem or dispute arising. We can provide a full appraisal of your contract or alternatively provide a “high level” review identifying some of the more important aspects of the contract that you need to be aware of.
A full contract review will include an examination of any Z clauses or contract amendments. We also consider key areas such as payment terms, delay damages, indemnities, liability and insurance, and provisions for termination and dispute resolution. Our reports, written in plain English, will highlight areas of risk with an explanation of how the parties’ rights and obligations may be affected. Where appropriate, our reports will make recommendations for change and include proposals for re-drafting of the contract conditions.
A healthy contract is a sign of a healthy project. We are able to provide basic contract health checks or more detailed and in-depth audits, assessing performance in the key areas of NEC contract management including:
The findings of our health checks and audits are presented in a report including, where necessary, recommendations for change or improvement.
NEC contracts are designed to encourage good management and facilitate collaborative working between all those involved in project delivery. Procedures for effective management of the risks to time, cost and quality are embedded in the contract. If followed correctly, the contract benefits both parties.