The enhancements that have been brought to the new NEC4 contracts are widely positive and a direct result of feedback from the industry, says Cameron Staude, Alusani® Course Leader.
“While the changes aren’t strictly necessary, the updates have added to an already successful contract. Some of the major improvements include the addition of a design build operate (DBO) contract as well as the Contractor’s design option as a secondary clause in the Engineering and Construction Contract (ECC),” says Staude.
According to the updated NEC4, the Contractor may propose a change to the Scope of work, which has the potential to reduce cost implications, and the contractor is now able to propose an acceleration to achieve Completion before the Completion Date. The Project Manager also has the option to accept and instruct, not accept, or request a quotation prior to making a decision.
The updated NEC4 may also lead to improved quality management as well as design and build contracting.
“The NEC4 contracts introduce a requirement for the Contractor to prepare and issue a quality management system and plan. A new secondary option has been created for the Engineering and Construction Contract (ECC) and Engineering and Construction Subcontract (ECS) with more extensive provisions specifically to support design and build contracting,” says Staude.
New methods of dispute resolution
The ECC now includes a dispute avoidance option. If the parties select this option, any dispute will be referred to a Dispute Avoidance Board nominated by the parties at the time the contract is formed.
“This approach means that the Dispute Avoidance Board members become familiar with the project prior to any dispute arising by making regular visits to see the project at set intervals, or when requested by the parties. If a dispute arises, it is referred to the Dispute Avoidance Board for review. The board visits the project to discuss the issues with the parties and help find a solution,” says Staude.
The board will them provide a recommendation to resolve the dispute if it cannot be resolved through discussion. The purpose is to encourage and support the parties in resolving any dispute or difference consensually, and to support users who wish to use this facility on their projects.
Essentially, the contracts meet new market demands as well as the expectations of future users. While the contract isn’t radically different, it is evolutionarily different as it supports the changing requirements of users and stimulates good project management.
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