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July 13, 2017

Why behaviours matter – part three

Why behaviours  matter – part three

It was great to see the huge interest from the international construction industry in the new NEC4 contract suite.

There was a record attendance of over 400 delegates at the NEC Users’ Group annual seminar on 22 June, which also served as the official launch for the new suite of contracts and users’ guides.
As some of you may know, I am now stepping down from my role as chair of the NEC Users’ Group as well as my role at HS2, so it was good to go out on a high point. I will continue to watch with interest how use of NEC continues to impact and improve the way the industry works.

This will also be my last editorial, continuing my theme of ‘why behaviours matter’ on NEC contracts – but perhaps slightly more frankly than before! In November I discussed the importance of aligning the behaviours of the client and contractor to each other and to the contract, and in March I reviewed the need for both parties to demonstrate they are prepared to adopt a collaborative behaviour, not just pay it lip service

In this issue I will look at how the mobilisation process after contract award should draw out how the parties will work together to achieve the client’s objectives.

Challenging contractor behaviour 
Over the course of my time both at HS2 Ltd and at Transport for London, much has been said about the importance of the ‘intelligent client’, the ‘informed client’ and so on. While it is true you cannot have a successful project if the client is relatively useless, very little is said about the ‘intelligent contractor’. Either we clients assume contractors are – by their very nature – intelligent or perhaps we are missing a trick.

As a parent I notice how easily client–contractor relationships can be equated with parent–child relationships. If the intelligent-client discussion is encouraging clients to behave as responsible adults, what role should the contractor play as their paid dependents? Certainly it is not that of a bratty two-year-old, who has to be constantly told not to hit his brother. 

Preferably it would be that of a responsible teenager, who phones you if their ride home from a late-night party is drunk and they don’t want to get in the car. So what behaviours do we really need to see from the contractor during contract mobilisation to make the relationship work? 

Honesty, transparency and commitment
First, honesty and transparency are key. If the contractor starts running three sets of books – one for the client, one for its board and one with the real data, how is an NEC relationship ever going to achieve mutual trust and collaboration?  Obviously both parties need to be honest and transparent. But, given their history of less-than-transparent behaviours in the past, contractors need to ensure their relationship with clients on NEC contracts is at least like that of a responsible teenager:  tell the truth even if it gets them into trouble in the short term.

Second, the commercial relationship needs to work. Much has been said about clients getting what they pay for when they go for the lowest priced bid without considering quality. Lowballing contractors spend much of their time trying to push up the fixed or target price through compensation events rather than committing to the job at hand.  

While many NEC clients now put greater emphasis on technical quality rather price, the behaviour demonstrated by winning contractors can still often be characterised as ‘chasing the compensation event’. Both parties should wish for the fixed or target price to result in a fair profit for the contractor, ensuring the contractor focuses on delivery rather than hiring armies of quantity surveyors to push up the price.  

Offering innovative solutions
Finally, contractors should try to be innovative as well. NEC contracts are designed to achieve the best outcomes for both parties, so it should not just be the client coming up with every solution. 

Continuing the parent–child analogy, responsible teenagers do not want to be told what to do and how to do it at every moment – they can come up with some good ideas as well, particularly as they may be more attune with modern technology. Contractors too should not just wait to be told what to do by clients – they should be making real efforts to contribute equally to successful outcomes.

In summary, the NEC is designed to support positive behaviour on both sides of the contract, but both the client and the contractor need to behave intelligently to achieve success. My final article in this series was to have been on the need manage the contract in accordance with its terms but, as intelligent NEC users, I think you all already know that. 
 
POSTED BY Beth West, NEC Users' Group Chair
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