NEC contracts have been used to deliver the UK’s biggest highways upgrade. The £1.5 billion A14 Cambridge to Huntingdon improvement scheme in eastern England involved upgrading 34km of the A14 highway to mostly dual three-lane carriageway.
The work included widening 5km of the A1 between Alconbury and Brampton west of Huntingdon; building a new 20km bypass south of Huntingdon with a 750m, 17-span viaduct over the River Great Ouse and a crossing of the East Coast main line railway; and widening 9km of the existing A14 between Swavesey, the M11 motorway and Milton just north of Cambridge. In total the project included 34 new bridges and structures.
Construction work started in November 2016 and the Huntingdon bypass was finished a year early in December 2019. The remaining sections are due to open to traffic ahead of the programmed date of December 2020, and the project is scheduled to be completed on time and budget in early 2021. Journey times for the 85,000 vehicles that use this part of the A14 each day will be reduced by up to 20 minutes.
Client Highways England originally let the construction works in 2015 as three separate packages under its Collaborative Delivery Framework, which is based on the NEC3 Engineering and Construction Contract (ECC) Option C (target cost with activity schedule). A Costain−Skanska joint venture was awarded the £413 million and £184 million sections between Alconbury, Ellington and Swavesey, while a Balfour Beatty−Carillion joint venture won the final £292 million Swavesey-to-Milton section. Atkins and CH2M (now Jacobs) carried out the detailed design under a £35 million NEC3 Professional Services Contract.
Change and governance manager David Stephenson, ‘Highways England chose ECC Option C for the Collaborative Delivery Framework as it ensures effective management of risk, quality, costs and programme by encouraging joint working. The complex interlinked nature of the A14 contracts also meant integrated working between the contractors was essential, so there was a specific requirement in the contract documentation for them to work together to ensure the project benefits were realised.’
Integrated working was further supported by the creation of the A14 Integrated Delivery Team, effectively a joint enterprise between the client, consultants and contractors. ‘By early 2016, all project branding was changed from individual project team members to that of the A14 Integrated Delivery Team, and all staff on site were seconded to the team by their respective employers,’ says Stephenson.
‘On a contractual level, fully integrated delivery was achieved through a deed of variation to the NEC works contracts. This enabled the contractors to subcontract all their respective work scopes to a programme-wide joint venture. The supply chain was then engaged solely by the joint venture under various NEC3 Engineering and Construction Subcontracts using option B (priced subcontract with bill of quantities) and option C.’
New Commercial Model
According to deputy project director Julian Lamb, ‘We knew from the outset that two of the biggest risks to the A14 contracts were archaeology and service diversions, so initially Highways England retained these as employer’s risks. The route crossed dozens of Neolithic, Bronze Age, Iron Age, Roman and Anglo-Saxon settlements, and we ended up with over 250 archaeologists working on site in nearly 40 separate excavations covering an area of 350ha. The works also required diversion of some 163 utilities.’
He says the sheer scale of the archaeological works and the knock-on effects of the digs, particularly delays in gaining access to borrow pits for earthworks and minerals, caused serious delays on the site. The majority of the utility diversions were also delayed, again causing severe disruption to the works.
‘We soon realised that all parties would either need to spend a long time forensically analysing the causes and costs of these delays, or we could all agree to a new simpler commercial model. So, through a second deed of variation to the NEC works contracts, the contractors agreed going forward to carry all risks on a joint basis and to deliver the works within the overall project budget.’
As Stephenson explains, ‘Now that the contractors were delivering the work as a joint venture, they were prepared to accept archaeological risks as by then the impacts of the digs were more clearly understood and could be more easily resolved on a project-wide basis. Similarly, the impact of utilities diversions became less contentious when viewed from a project-wide perspective. Challenges were still flagged through the NEC early warning process but, through fully collaborative working, the team found solutions that have kept the project within the original budget and programme.’
He says the pain/gain incentives in the initial contracts were largely based on individual contract values rather than the overall project cost. ‘In the revised contracts, the pain/gain share incentive was based entirely on the overall project cost, which meant the contractors were seeing everything from the client’s perspective rather than just their own.’
Overall Stephenson says the new commercial model has worked very well. ‘It is testament to NEC’s flexibility that the contractors were able to form a joint venture and then change their risk allocation and incentives as the project progressed. NEC’s underlying ethos for the parties to work together to resolve issues and find the best way of delivering the project has been a significant factor in helping to make the A14 Integrated Delivery Team a great success.’
Benefits of Using NEC
- NEC has enabled the UK’s biggest highways upgrade to be completed on budget and on programme despite hosting one of the largest archaeological projects ever undertaken in the UK.
- NEC ECC Option C target contracts ensured collaborative management of risk and full transparency of cost and programme, encouraging parties to work together find the best solution for delivering the project.
- NEC flexibility enabled the contractors to form a programme-wide joint venture and for their risk allocation and incentive mechanisms to be changed as the works progressed.
- The comprehensive NEC contract suite provides an integrated and consistent procurement approach across the whole supply chain.