How we can help small firms benefit from NEC

As all NEC users are aware, small businesses – that is those employing fewer than 50 people − are the backbone of the construction delivery process. Over 95% of UK construction businesses are small firms, and thousands of construction clients are also running their own small businesses.

However, many of the benefits of using NEC contracts – greater collaboration, effective and efficient risk management mechanisms, and easier processes for establishing contractual entitlements – are not being realised in the small business sector.

Some years ago the owner of my local dry-cleaning shop asked me if there was a standard off-the-shelf contract he could use to employ the builder he was using to expand his shop. I suggested the NEC3 Engineering and Construction Short Contract (ECSC) and, though he had not heard of NEC , he quickly warmed to the benefits when I explained them to him.

Untapped market

I have no doubt there are still thousands of other small businesses like my dry-cleaner friend who have also not heard of NEC. Likewise I believe there are thousands of similar firms providing various types of construction-related consultancy services and construction works that have never seen an NEC contract.

There is clearly a massive opportunity to maximise the benefits of NEC throughout the industry. So how do we reach these potential NEC users? NEC already generates a phenomenal amount of learning materials and events to promote the use of the contracts and enable best practice in their use.

But more can always be done and, in this instance, existing NEC users may be in a good position to help.

Spreading the word

For example, local authority NEC users could use various avenues within their own localities − such as chambers of commerce − to make local businesses aware of NEC and how NEC contracts would benefit their businesses. In addition, where there are any regional or local projects using NEC which already involve small firms, this could be promoted by larger NEC users through local media coverage.

NEC users belonging to trade associations or professional bodies could also, through their organisations, highlight the benefits of NEC for fellow members which are small firms. And perhaps, via the NEC Users’ Group, we could communicate and promote successful NEC projects delivered by small businesses. Please email suggestions for case studies to usergroup@neccontract.com.

Avoiding amendments

But whatever we do to encourage small firms to join the NEC community, we need to do it with unamended contracts. A while ago I represented a small, family-owned contractor in a difficult NEC adjudication where the client had significantly amended an ECSC in its favour. Given how unfair the contract had become, the contractor would be reluctant to use NEC again.

I have said it many times in this column that amendments to NEC clauses should be avoided where possible. If you or your legal advisers have amended the body of the contract, you may fall foul of the NEC copyright licence if you are still passing off the document as an NEC contract.

That said, as a users’ group I believe we should enlist every available avenue to encourage interest in the values inherent in NEC contracts across the small-business sector. Any thoughts on this from users would be very welcome.