NEC4: Engineering and Construction Contract Option D: target contract with bill of quantities
The NEC4 Engineering and Construction Contract (ECC) Option D is the target cost main works contract with a bill of quantities. It can include any level of design, and is ideal for more complex or larger projects where the client and contractor are willing to share project financial risk in a fully collaborative way.
The contractor prices the quantities specified in the client’s bill of quantities based on actual cost plus a fee, resulting in a target price. The client makes interim payments based on the quantity of work done at each assessment date and differences from the target price are shared according to an agreed pain/gain share proportion. This directly incentivises both parties to look for cost savings throughout the works.
The document contains everything you need to prepare, tender and manage an NEC4 ECC Option D contract, including all relevant secondary options and forms for the cost schedule and contract data.
The NEC4 ECC is the main works contract in the NEC4 suite of collaborative, flexible and clearly written contracts for built environment procurement. It has a global track record for delivering all kinds and sizes of building and infrastructure projects on time, on budget and to the highest environmental and quality standards.
As with all NEC4 contracts, the parties are required to act in a ‘spirit of mutual trust and co-operation’ and give early warnings of anything that could affect time, cost or quality so it can be mitigated without delay. Change is dealt with by a fast and fair compensation event process which, together with a continually updated and agreed programme, ensures there are no surprises at completion.