In 2013 the University of Salford hosted an event (organised by the Constructing Excellence Manchester Best Practice Club) at which over 100 people heards about the Pitfalls of NEC3.
What struck me was that many of the knotty problems associated with NEC3 apply to any form contract.
What you should do with NEC
- Read the contract: NEC3 is written in plain language. It is not over-burdened with jargon and legalese.
- If you operate it properly, then the contract works fine: This applies to contracts with which you are really familiar (or think you are) as well as those you have never used before.
- Comply with every word of the contract: the speaker’s opinion was that the detail in some of the NEC3 provisions is excessive eg in relation to the programme. However, he said it was better to strive to get an agreed programme than leave it to be sorted out when compensation events arise (and the Project Manager gets to draft her version).
- If it’s not listed in the contract, you have no remedy: the speaker was specifically referring to compensation events (clause 60.1) and the need for the contractor to identify which of the 19 compensation events apply. But the issue is a wider significance, especially where the contracts have an entire agreement or exclusive remedies clause.
- Note the different roles of the contract administrators: NEC3 names both a Supervisor and a Project Manager, with distinct roles and authority. Nonetheless, for any contract it is important to understand precisely which person has the relevant authority. For example, notices sent to/by the wrong person may be invalid.
- I don’t like NEC so I’ll treat it like <insert your favourite>: when a contract administrator does not administer the contract properly, you may as well say a big ‘hello to catastrophe’. Contracts not only need to be read (1) and operated properly (2), they need to be administered correctly.
- Use the correct terminology: NEC3 does not have extensions of time, variations, delay/disruption, practical completion or preliminaries. Follow tip 1, otherwise you will be speaking in the wrong language..
- Don’t be afraid of being pedantic: Communication, regular, clear and discrete notices, are required under NEC3 in a form that can be read, copied and recorded (ie not verbal) and sent to the right address. It pays to be pedantic in the pre-contract phase as, once work has started on site, everyone gets distracted by trying to complete the project.
- Silence is not consent: Under NEC3 there are just 3 occasions when acceptance can be deemed [more under NEC4] – all require the contractor to send a reminder. Although it might seem the pragmatic and easy course of action to just get on with procedures or work on the basis that the consent can be ‘sorted out later’, this is not best practice under any contract.
- Understand the contract:If you don’t understand the contract in the relative calm of the contract negotiation phase, there is little chance you will get a moment of inspiration in the frenetic construction phase.