News & Media
September 24, 2021

NEC and CLC publish joint guidance on how to deal with Covid impact on NEC contracts

NEC and CLC publish joint guidance on how to deal with Covid impact on NEC contracts

By Simon Fullalove

NEC and the UK’s Construction Leadership Council (CLC) published joint industry guidance in July on how to deal with the impact of Covid-19 on NEC contracts (NEC & CLC, 2021). It focuses on the NEC4 Engineering and Construction Contract (ECC) but can be adapted for the NEC4 Engineering and Construction Subcontract (ECS), NEC3 ECC and NEC3 ECS.

The joint guidance offers support to NEC clients and their supply chains on how to collaboratively deal with issues arising from the pandemic, including acts of prevention, project manager’s instructions, compensation events, evaluation of Covid-19-related compensation events, working areas, resource utilisation and dealing with risk on future contracts.

Resolving uncertainty

Steve Bratt, chair of CLC’s business models workstream, said, ‘As industry continues to manage the challenges of Covid-19, we are becoming increasingly concerned that many outstanding disputes remain unresolved and much uncertainty exists with regard to future contracts. We are therefore keen to do all we can to ensure clients work with their supply chains to fairly and collaboratively manage the commercial risks caused by Covid-19. Safety is paramount, but collaborative risk sharing will ensure secure project delivery and a long-term sustainable industry.’

He said the Covid-related safe working procedures and wider disruption had presented all parties with unquantifiable and unmanageable risks and costs. ‘Traditional behaviours such as inappropriate risk transfer will not only lead to a negative outcome on individual contracts but will almost certainly lead to systemic failure in a fragile market seeking to build back greener and better. I would therefore like to thank NEC colleagues for collaborating with the CLC team and demonstrating the leadership our industry needs at this time in developing this guidance.’

Managing Covid risks

Peter Higgins, chairman of the NEC4 contract board, said, ‘NEC is pleased to have worked with the Construction Leadership Council in preparing this advice on dealing with Covid-related issues under NEC contracts. NEC has always been a contract focusing on the parties working together to achieve a successful contract, and this guidance will help in managing collaboratively the risks which have arisen from Covid-19’. Key individuals who worked on the guidance included Jon Miller of Fenwick Elliott and Andrew Croft of Beale & Co on behalf of CLC, and Peter Higgins and Ian Heaphy on behalf of NEC

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