NEC’s mission from the outset has been, ‘to provide clarity, flexibility and stimulate good management’. No other contract suite aspires to improve the procurement and delivery process, rather than just facilitate it.
All NEC4 contracts are designed around the following three principles:
- They stimulate good management of the relationship between the two parties to the contract and, therefore, of the work involved in the contract.
- They can be used in a diverse range of commercial situations, for a wide variety of types of work and in any location around the world.
- They are clear, simple and written in plain English, using language and a structure which is straightforward and easily understood.
Uniquely, one of the foundation clauses of every NEC4 contract states the parties are to act, ‘in a spirit of mutual trust and co-operation.’ This differentiates them from traditional contracts, which tend to follow a more adversarial, ‘us and them’ approach.
To many users, the ‘jewel in the crown’ of NEC4 contracts is the ‘early warning’ process. if either party becomes aware of any matter which could affect time, cost or quality, they are required to notify the other party immediately. This is promptly discussed at an early warning meeting to decide how best to mitigate the risk and aiming to decrease the time taken to resolve the issue.
If there are changes to the amount of work the supplier has to do, there are clearly defined processes to handle changes in costs and time called ‘compensation events’. The contracts also provide a clear and precise process for evaluating the cost and time implications of compensation events, which include events arising from client scope changes, and the contract sets out the process to determine the time and cost effects, within a set timescale.
The result is that the programme and budget are continually updated and agreed as changes and events happen. There should be no surprises at the end of an NEC4 Contract. All works and supply contracts also allow for early contractor/supplier involvement.