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March 01, 2019

NEC4 Amendments January 2019

NEC4 Amendments January 2019  

The NEC4 suite of contracts was published in June 2017. Following publication there has been discussion of and feedback from users and industry experts on the new features, forms and changes which were introduced. This feedback has been extremely positive overall and has provided many constructive suggestions as to how the contracts could be further enhanced.

To build on the constructive feedback and further improve the contracts the NEC has published a set of amendments. Users should consider reflecting these changes in their upcoming tenders or existing contracts as amendments.

ECC Clause 63.5: Assessment of Delay Due to a Compensation Event

A change has been made to clause 63.5 to embed good practice and provide further clarity around the process. In summary, the third paragraph has been replaced by:

“The assessment takes into account

  • any delay caused by the compensation event already in the Accepted Programme and
  • events which have happened between the date of the Accepted Programme and the
dividing date.”

 

This change was in response to user feedback after the ‘Practice Note 1’ published in in October 2017, where users asked for more formal provision within the contract to embed the good practice contained in the practice note.

This change also applies to the equivalent clauses in DBOC, ECS, PSC, PSS, SC, TSC and TSS.

ECC Clause 90.2: Termination Table

A minor change has been made to provide consistency with the procedures that apply in the event of termination by the Contractor due to the same ‘no fault’ reasons. No changes have been made to the amounts due as stated in the Termination Table.

This change also applies to DBOC, ECS, PSC, PSS and SC.

ECC Option C, D, E and F Clause 50.9 – Agreement of Defined Cost

Minor improvements have been made to clause 50.9 to clarify that the finalisation is for the Defined Cost for a part of the works giving closure to both the Client and Contractor in relation to these costs.

This change also applies to the equivalent clauses in DBOC, ECS, PSC, PSS, TSC and TSS.

ECC Option W1 and W2 – Senior Representatives

An addition has been made to Clauses W1.1(1) and W2.1(1) to allow either Party to replace their Senior Representative after notifying the other Party of the name of the replacement. This provides a formal process to change the Senior Representatives, which otherwise would require the mutual agreement of the Parties.

This change also applies to the equivalent clauses in DBOC, ECS, PSC, PSS, SC, TSC and TSS.

PSSC – The Consultant’s Contract Data – People Rates

Changes have been made to the PSSC to clarify the difference between work undertaken on a time charge basis as opposed to rates and lump sums.

The first change is to clarify that the Client has to select one of these options as the contract does not provide for a mixture of time charge and rates and lump sums to be used.

It is now also clear that where work is to be carried out on a time charge basis the Consultant includes people rates for its own people and people provided by a subcontractor and that these rates should be exclusive of the Fee. Where work is undertaken on a time charge basis the fourth bullet of clause 53.3 has been changed to make these rates subject to the addition of the Fee.

This change does not apply to any other contracts.

SC, ECS, PSS, TSS – Project Bank Account

In the SC and the main forms of subcontract (ECS, PSS and TSS) the form of Trust Deed and Joining Deed for secondary Option Y(UK)1 Project Bank Account has been removed as the Supplier or Subcontractor will become a member of a Project Bank Account created under a main contract.

A schedule of amendments is available for each contract on the NEC contract website www.neccontract.com.

Written by Matthew Garratt, NEC4 Drafter

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