Frequently Asked Questions

Question
We are a client planning to let an NEC4 Design Build Operate Contract (DBO). Can the performance measurements be written to be a positive or negative adjustment on the amount due to the contractor?
The answer is yes but it depends upon just how you complete the performance table. Clause 53.3 provides that if a part of the service does not meet your stated target for an operational requirement, then the contractor pays the amount you stated in the performance table.

This will be assessed by your service manager, but only if you stated an amount in the performance table.

If a part of the service exceeds the same target, then you pay the contractor the amount stated in the performance table. Again, this is assessed by the service manager but only if you stated an amount in the performance table.

Unlike similar provisions for key performance indicators in other NEC4 contracts, there are no provisions in the DBO for adding other performance measurements into the contract after the contract date.

You could achieve this using clause 12.3, but only if the contractor agrees to such a change.

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