The history of NEC is still being written!
15/04/2024
Newsletter #2, here is our highlights of what we cover this week:
History of NEC Contracts
Anglian Waters search for delivery partners
Hinkley Point C: An infrastructure Project Success Story
NEC4 ECS Target Cost
NEC4 Y(UK)2 amendments in PSC, TSC, DBOC
1 General
The history of NEC contracts, and its establishment as the go-to solution for infrastructure procurement extends back several decades. It’s summarised nicely in this report by NEC, however the lead up to this was much longer in the making, let’s explain:
As always, the push for innovation is driven either by customers or competition. In this instance the drive between the Royal Institute of British Architects (RIBA) and the Institution of Civil Engineers (ICE). RIBA started their journey towards JCT (Joint Contracts Tribunal) contracts in 1879, and whilst the ICE had been around since 1818 they hadn’t formalised a standard contract for their construction projects, resulting in bespoke agreements. The ICE subsequently developed and deployed their ICE Conditions of Contract from the first edition in 1945 to the seventh and final edition in 2001.
But the industry wasn’t satisfied and thus the history of NEC is established from 1986, as told in the report (History of NEC)
To show the advancement of NEC, it is only with the release of JCT 2024 that they will offer a ‘Target Cost’ contract, an option which has been available with NEC since its inception.
Thomas Telford - Portrait of the Institution of Civil Engineers first President.
3 Programme
Anglian Water seeks programme delivery partners in 15-year £750M contract
Anglian Water Services has commenced pre-market engagement to deliver this significant multi-AMP programme of work. Being home of the @one Alliance since 2005, it is to be expected that Anglian will focus on collaboration and as noted in the article, the need to “fully integrate with Anglian Water Services”.
Key to note is the upcoming webinar on Thursday 25th April at 9am, providing further information on scope.
Taking a look in the rear-view mirror, Fenwick Elliott LLP have an interesting paper on the use of NEC4 Alliance contracts, from back in 2018.
3 Programme
Hinkley Point C: An Infrastructure Project Success Story
A mega-project for the UK, Hinkley Point C shows enormous investment via EDF who have been utilising NEC contract for delivery. This article provides insight into some of the approached taken by the project to obtain the right outcomes. Read the story here.
5 Payment
NEC4 ECS Target Cost - Share Mechanism - Clause 54.1
Rob Tustin has undertaken an excellent review and assessment of Option C drafting for the Engineering and Construction Subcontract. He rightly points out that while the mechanism does work, there is room for improvement and simplicity. Will we see this developed in NEC5, we think Rob has excellently highlighted opportunities.
Y Clauses
NEC4 Y(UK)2 amendments in PSC, TSC and DBOC
Following amendments to Y(UK)2 in October 2020 to address issues with payment terms, and the issuing of invoices, this article further explains the changes decisions given in the September 2023 judgement in Lids Great Britain Ltd v. Closed Circuit Cooling Ltd. Read the article to understand the change and why the Rochford case in 2020 was so critical.
Reminder of Upcoming Industry Events
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