NEC is supporting the growing use of it contracts in Australia and Ireland by publishing country-specific secondary option Y clauses.
There has been significant interest in Australia following Sydney Water’s decision to adopt NEC4 contracts for collaboratively delivering up to AU$4 billion (£2.2 billion) of water and wastewater works and services over the next 10 years.
Similarly in Ireland, Cork County’s Council’s pioneering and successful use of NEC for a complex €25 million (£22 million) remediation of Haulbowline Island tip is prompting other Irish local authorities to follow suit. Irish Water and the Road Management Office are already users.
Complying with legislation
Like the three UK-specific Y clauses included in NEC4 contracts and two separately published ones for New Zealand, the new Australia and Ireland clauses will help the increasing number of users in those countries bring NEC4 contracts into line with local contract legislation.
In Australia, the new Y(AUS) clause will make NEC4 contracts comply with the various security-of-payment laws enacted in each of the country’s states and territories. The clause will have separate provisions depending on where the work, service or supply is carried out, so that in any one contract only some parts of the clause will apply.
In Ireland, the new Y(IR) clause will incorporate the requirements of the Irish Construction Contracts Act 2013 into NEC4 contracts, in the same way that Y(UK)2 incorporates the UK Housing Grants, Construction and Regeneration Act 1996.
Guidance notes and flowcharts
Both new clauses will apply to all NEC4 contracts, including subcontracts and short forms, that could be subject to the local legislation. Guidance notes will be included with the clauses and flowcharts for each contract will be published separately.
Similar to the Y(UK) and Y(NZ) clauses, the new Y(AUS) and Y(IR) clauses will deal with legislative requirements that need a different approach to standard NEC4 contracts. These include timing of payment applications, responses to payment applications, rights to suspend performance for non-payment, and adjudication of payment disputes.
The Australia clause drafters are consultants Kiri Parr and Kevin Pascoe with the assistance of Consult Australia and Pinsent Masons Australia, while the Ireland clause is being drafted by James Golden of Quigg Golden Ltd.