Changes in NEC4 supply contracts

The NEC4 Supply Contract (SC) and NEC4 Supply Short Contract (SSC) have been updated in line with the rest of the contracts in the new NEC4 suite.

Since they first appeared in 2009, the two supply contracts have become increasingly widely used. This is anticipated to continue as the NEC4 suite becomes the ‘contract of choice’ for many organisations.

The SC and SSC enable the purchase of goods of any complexity sourced from anywhere in the world. The contracts can be for any sector and any level in the supply chain.

The updated contracts have better alignment with the NEC4 suite of contracts, provide improved commercial arrangements and offer more opportunities for purchasers and suppliers to be proactive and innovative.

The main changes from the NEC3 versions are as follows:

Managing risk – as with other NEC4 contracts, the term ‘Risk Register’ has been replaced with the more appropriately termed ‘Early Warning Register’, better reflecting the risk management process within the contract
Communications – the communication protocol also now includes provision to specify a communication system within the scope. This mirrors modern use of the SC and frequent adoption of collaborative software systems in practice
Scope – this replaces the term ‘Goods Information’ and is now standard in all NEC4 contracts. The scope includes supply requirements, which allow users to comply with the latest international trading terms if they need to do so
Cost transparency – commercial amendments include an improved definition of cost. This now sees the incorporation of a detailed schedule of cost components. Provision for people rates have also been included
Option improvements – the X12 partnering option has been replaced with a multiparty collaboration option, a term which better describes the structured collaborative agreements typically seen on larger contracts. This should help suppliers in being genuinely included within supply chain arrangements and provide real incentive for innovation. This is further enhanced through a new option on supplier’s proposals. This provides the facility for the supplier to propose changes to the scope to reduce the cost of an asset over its whole life.