QuestionWhat are the changes to the NEC3 Engineering and Construction Contract?
In terms of its structure, the NEC3 Engineering and Construction Contract (ECC) will look fairly familiar to experienced users of the ECC 2nd edition. If one examines the contents page, the core clauses are
2. The Contractor’s main responsibilities
4. Testing and Defects
6. Compensation events
8. Risks and insurance
9. Termination.* * Formerly ‘disputes and termination’, the disputes clauses are now included under options W1 and W2.
The main option clauses are
• 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. There are also two options for dispute resolution
• Option W1 (used unless the Housing Grants, Construction and Regeneration Act 1996 applies)
• Option W2 (used when the Housing Grants, Construction and Regeneration Act 1996 applies). The secondary option clauses are
• Option X1: Price adjustment for inflation
• Option X2: Changes in the law
• Option X3: Multiple currencies
• Option X4: Parent company guarantee
• Option X5: Sectional Completion
• Option X6: Bonus for early Completion
• Option X7: Delay damages
• Option X12: Partnering
• Option X13: Performance bond
• Option X14: Advanced payment to the Contractor
• Option X15: Limitation of the Contractor’s liability for his design to reasonable skill and care
• Option X16: Retention
• Option X17: Low performance damages
• Option X18: Limitation of liability*
• Option X20: Key Performance Indicators*
• Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996
• Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999
• Option Z: Additional conditions of contract.
* New secondary options.
Apart from the alphanumeric listing, and new options X18 and X20, the secondary options remain the same, though there are references to ‘defined cost’ (formerly ‘actual cost’), a new term which we will consider in the next issue. The other parts of the contract are • Schedule of Cost Components • Shorter Schedule of Cost Components • Contract Data. There are a number of changes within the core clauses, and in the main and secondary options, which we will consider in this and in further editions of the newsletter.