We are offering free access to the following NEC papers only until 30 June 2015:
NEC contracts provide an excellent basis to encourage and support risk management through all stages of any project or service provision. Partly because they are good for risk management, NEC contracts have anecdotally helped avoid disputes. After more than 12 years of use for possibly billions of pounds worth of work in probably tens of thousands of projects in more than 20 countries there remains only one piece of case law relating to the use of the NEC. The aim of this paper is to explain how NEC contracts can be used to reflect the particular risk allocation intended by the parties to the contract through the use of the options within the contract. It then explains the key tools and processes in the contract for the ongoing management of risk, including the NEC’s ‘Risk Register’ and the allocation of risk in quotations for the effects of events at the client’s risk.
The paper consists of a high-level comparison between the NEC third edition and the Fidic (Fédération Internationale des Ingénieurs-Conseils) 1999 suite of contracts. The paper covers the origins of each suite of contracts and then compares each of the individual contact forms published by the NEC and Fidic. The paper then moves on to focus on the NEC Engineering and Construction Contact and the Fidic 1999 Red and Yellow Books. The key areas of structure and format, contents of a contract document, roles and responsibilities, variations/extension of time/claims and dispute resolution are then compared and contrasted. The paper concludes with a view on the relative advantages and disadvantages of each contract form and consideration as to why each may be selected.