The NEC4 Engineering and Construction Contract (ECC) Option C is the target cost main works contract with an activity schedule. It can include any level of design, and is ideal for more complex or larger projects where the client and contractor are willing to share project financial risk in a fully collaborative way.
The contractor prices activities in the client’s activity schedule based on actual cost plus a fee, resulting in a target price. The client makes interim payments on completion of each activity and differences from the target price are shared according to an agreed pain/gain share proportion. This directly incentivises both parties to look for cost savings throughout the works.
The document contains everything you need to prepare, tender and manage an NEC4 ECC Option C contract, including all relevant secondary options and forms for the cost schedule and contract data.
The NEC4 ECC is the main works contract in the NEC4 suite of collaborative, flexible and clearly written contracts for built environment procurement. It has a global track record for delivering all kinds and sizes of building and infrastructure projects on time, on budget and to the highest environmental and quality standards.
As with all NEC4 contracts, the parties are required to act in a ‘spirit of mutual trust and co-operation’ and give early warnings of anything that could affect time, cost or quality so it can be mitigated without delay. Change is dealt with by a fast and fair compensation event process which, together with a continually updated and agreed programme, ensures there are no surprises at completion.
- The Contractor’s main responsibilities
- Quality management
- Compensation events
- Liabilities and insurance
Resolving and Avoiding Disputes
- Option W1
- Option W2
- Option W3
Secondary Option Clauses
- Option X1: Price adjustment for inflation
- Option X2: Changes in the law
- Option X4: Ultimate holding company guarantee
- Option X5: Sectional Completion
- Option X6: Bonus for early Completion
- Option X7: Delay damages
- Option X8: Undertakings to the Client or Others
- Option X9: Transfer of rights
- Option X10: Information modelling
- Option X11: Termination by the Client
- Option X12: Multiparty collaboration (not used with Option X20)
- Option X13: Performance bond
- Option X14: Advanced payment to the Contractor
- Option X15: The Contractor’s design
- Option X16: Retention
- Option X17: Low performance damages
- Option X18: Limitation of liability
- Option X20: Key Performance Indicators (not used with Option X12)
- Option X21: Whole life cost
- Option X22: Early Contractor involvement
- Option X29: Climate Change
Options X3 and X19 are not used.
- Option Y(UK)1: Project Bank Account
- 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
- Schedule of Cost Components
- Contract Data
- Part one – Data provided by the Client
- Part two – Data provided by the Contractor
NEC4 Y Clauses - February 2023
Y Northern Ireland Clauses
NEC4 Y Clauses - February 2021
NEC is supporting the use of its contracts in Australia and Ireland by publishing secondary Option Y clauses.
Y Australia Clauses - Y(Aus) Clauses
Y Ireland Clauses - Y(Ire) Clauses
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