NEC4: Supply Contract

The NEC4 Supply Contract (SC) is for local and international purchase of high-value goods and related services, including design and training. Examples include major items of plant, such as turbines, generators, transformers, pumps, rolling stock, cranes, gantries and tunnel boring machines.

It is is the main supply contract in the NEC4 suite of collaborative, flexible and clearly written contracts for built environment procurement.

The SC is a priced contract with additional NEC benefits, such as collaborative working, effective risk allocation and sound management. The International of Chamber of Commerce Incoterms can also be incorporated, making the contract ideal for international procurement.

The document contains everything you need to prepare, tender and manage an NEC4 SC, including all secondary Options and forms for the cost schedule and contract data.

Background

The NEC4 suite 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 to an SC are required to act in a ‘spirit of mutual trust and co-operation’ and give early warnings of anything that could affect cost, delivery date or performance of the goods 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 delivery programme, ensures there are no surprises.

Core Clauses

1. General
2. The Supplier’s main responsibilities
3. Time
4. Quality management
5. Payment
6. Compensation events
7. Title
8. Liabilities and insurance
9. Termination, resolving and avoiding disputes

Option Clauses

• Option X1: Price adjustment for inflation
• Option X2: Changes in the law
• Option X3: Multiple currencies
• Option X4: Ultimate holding company guarantee
• Option X7: Delay damages
• Option X10: Information modelling
• Option X11: Termination by the Purchaser
• Option X12: Multiparty collaboration (not used with Option X20)
• Option X13: Performance bond
• Option X14: Advanced payment to the Supplier
• Option X17: Low performance damages
• Option X18: Limitation of liability
• Option X20: Key Performance Indicators (not used with Option X12)
• Option X21: Whole life cost
• Option X25: Supplier warranties

Options X5–X6, X8–X9, X15–X16, X19 and X22–X24 are not used.

• Option Y(UK)1: Project Bank Account
• Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999
• Option Z: Additional conditions of contract

• Schedule of Cost Components
• Contract Data
  • Part one – Data provided by the Client
  • Part two – Data provided by the Contractor
• Index

NEC4 X Clauses - X29 Climate Change - July 2022

NEC has published a new secondary Option that enables construction clients to engage their suppliers in the global drive towards net-zero greenhouse gas emissions and sustainability.

• NEC4 X29 - Supply Contract
• NEC4 X29 - Supply Contract Guidance Notes

NEC4 Y Clauses - February 2021

NEC is supporting the use of its contracts in Australia by publishing secondary Option Y clauses.

Y Australia Clauses - Y(Aus) Clauses

• NEC4 Y(Aus) - Supply Contract
• NEC4 Y(Aus) - Flowcharts for all contracts
• Download all the Y Australia Clauses

Users should note that the NEC Forms of Contract are protected by copyright and may not be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical or photocopying, recording or otherwise, without the prior permission of the copyright owner. However, Contract Data forms may be reproduced for the purpose of obtaining tenders, awarding and administering contracts.

Likewise, plagiarising any copyrighted document is illegal. For users seeking to prepare their own bespoke contracts based on the NEC Forms of Contract, please contact NEC at info@neccontract.com to discuss and obtain a copyright licence.