Many people choose a construction contract not for its cost, nor for its fine words, but for their familiarity with the terms and conditions. Although one of the shorter standard forms, what if we could condense NEC… what should it say?
No précis of NEC3 could omit its principal feature: the obligation on the parties and those assisting them “to act in a spirit of mutual trust and co-operation” (clause 10.1).
NEC3 provides plenty of process, remedies, flowcharts and other clauses. But I want to focus on obligations and duties of the relevant people. This is my edited list:
As with many standard form contracts, many of the obligations of the Employer are passed to a professional to assist. The Project Manager is employed by and has duties to the Employer to act in his interests. The specific list of Employer obligations for NEC3 is remarkably short:
- To allow possession of the site to the contractor (clause 33.1)
- To pay the contractor (51).
The Contractor’s obligations number more than 60 in the express words of the NEC3, mostly drafted in the present tense (to the annoyance of some commentators and lawyers). But even with this large number of express duties and obligations, there are omissions and many of the contractor’s obligations might actually be in the Works Information, as Eggleston suggests.
So here’s my list of the key obligations:
- To complete the works and provide whatever is required for such completion as required by the Works Information (20.1, expanded by 11.2(13))
- To give early warnings of delay, cost or performance issues (16.1)
- To keep the project team informed (16-18)
- To design the Works, as required by the Works Information (21.1)
- To co-operate with others in obtaining and providing information (25.1)
- To only subcontract with express permission (25-26)
- To meet the completion date (30.1) and any key dates (30.3)
- To correct defects (40.4, 43.1 and 43.2) or pay the cost (45.1 and 45.2)
- To provide insurances (84.1).
The Project Manager
The Project Manager is NEC3 jargon for the Contract Administrator. The role is a combination of acting as the agent for the Employer, passing on instructions and decisions, and acting in an independent certifier role when assessing rights and remedies.
- To provide instructions, notifications, record decisions, particulars, reasons all as required (multiple clauses)
- To make decisions on dates (30.2) and the contractor’s programme (31 and 32)
- To issue certificates of taking over (35.3), payments (51.1), final payments (90.4)
- To assess the rights and remedies of the parties in relation to e.g. compensation events (61-65).
This role is unusual as it marks the separation of the administration of the contract – carried out by the Project Manager – from the supervision of the carrying out of the contractor’s obligations. It is unique to NEC3.
- To test and inspect the works (40.5) and notify the contractor of passes (41.1) and failures (42.2)
- To issue the defects certificate (43.3).
That is my version of NEC3… in a nutshell!
For more information see Brian Eggleston’s Commentary on NEC3 (2006, Blackwell Publishing).
For training on NEC3, please ask Sarah Schutte of Schutte Consulting to assist. I prefer to train on the JCT and IET MF contract suites.