NEC announces the forthcoming release of its new suite of facilities management contracts (FM contracts) developed with the support of the Institute of Workplace and Facilities Management, IWFM.
The new contract suite is designed to be used for all types of facilities management procurement and delivery strategies.
The NEC4 FM Contract Suite
The new suite of FM contracts has been developed to support a range of FM contract approaches including “total FM” / integrated services FM contracts, managing contractor FM contracts, and single and / or multiple supplier FM contracts. The new contracts are
- Facilities Management Contract (FMC):
- used by a Client to appoint a Service Provider for a period of time to manage and provide any type of facilities management services,
- Facilities Management Subcontract (FMS):
- used by a Service Provider to appoint a Subcontractor, also for a period of time, to manage and provide a part of a service where the Service Provider has been appointed under the NEC4 FMC,
- Facilities Management Short Contract (FMSC):
- used by a Client to appoint a Service Provider for a period of time to manage and provide any type of facilities management services which do not require sophisticated management techniques, comprise straightforward services and impose only low risks on the parties, and
- Facilities Management Short Subcontract (FMSS):
- used by a Service Provider to appoint a Subcontractor, also for a period of time, to manage and provide any type of facilities management services which do not require sophisticated management techniques, comprise straightforward services and impose only low risks on the parties and where the service provider has been appointed under the FMC, FMS or FMSC.
As with all NEC4 contracts each contract will be supported by a set of user guides and flowcharts, which have been revised to support facilities management agreements.
The contracts can be used with any of the other contracts in the NEC4 suite as either main contracts or subcontracts such as for example the Design Build and Operate Contract, Alliance Contract and Supply Contract.
Key features of the NEC4 FM contracts
The contracts have been updated from the NEC4 suite specifically for the FM industry, whilst retaining the best practice principles and features of the NEC forms of contract. All NEC4 contracts, including the new FM 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 wide variety 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, 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.
Main pricing Options
The FMC features three main pricing options:
• Option A
, priced contract with Price List
• Option C
, target contract with Price List
• Option E
, cost reimbursable contract
In the FMSC a Price List is used and operates in a similar way to main Option A in the FMC.
Secondary Options (FMC)
The contracts are modular in form with a range of secondary options available for selection which allows the Client to tailor the contract to suit its specific needs and allocate risk appropriately without the need to amend the standard contract.
Secondary options available include multiparty collaboration, information modelling (BIM) and extending the Service Period. A secondary option is also included which deals with a change in control of the Service Provider and allows the Client to terminate the Service Provider’s obligation to provide the service in certain circumstances.
When and how they are being launched
The FM suite is being launched on 26 January 2021. The first documents available will be:
- Facilities Management Contract (FMC)
- Facilities Management Subcontract (FMS)
- User Guides:
- Establishing a Procurement and Contract Strategy
- Preparing a Facilities Management Contract
- Selecting a Supplier
- Managing a Facilities Management Contract
- Flow Charts:
These will all initially be available as a prepublication edition via digital download from neccontract.com. The remaining documents, along with the first edition of the above documents and supporting Guidance Notes. We will also launch the first in a series of Practice Notes tailored to localised / regional FM markets, providing guidance on important themes in the FM industry. Those who have already purchased the prepublications will get twelve months’ complimentary access to the first edition.
The FM suite is being launched on 26 January 2021 . As part of the launch, there will be a joint webinar by NEC and IWFM outlining the features and processes within the contract and why they are a good fit for the FM sector.
The webinar will be at 1pm (GMT) and should last for around one hour.
NEC and IWFM – Working towards the FM contract
NEC and IWFM worked together on a Facilities Management Box Set for the NEC3 contracts and delivered some successful joint events on the use of NEC contracts within the FM sector. This was formalised by a Memorandum of Understanding in 2016. The new NEC4 FM suite is the latest piece of work to stem from this collaboration.
NEC acknowledges and is grateful for the ongoing support of IWFM and its members, especially in the development and delivery of these contracts and supporting documents. The IWFM NEC Steering Group have, in particular, made significant contributions in terms of insight and workplace examples.
This journey together started with some NEC instigated research to identify best practice in the facility management industry and included stakeholder workshops with IWFM members as well as consultations with specific stakeholders.
The new FM contracts and their supporting documents are a great step forward to enable the sector to offer more integrated and consistent procurement strategies, adding value to the supply chain and developing stronger, more collaborative, relationships and ways of working.