Is your infrastructure project getting the most from NEC4?

Gareth Williams
With its contractual emphasis on the programme, NEC4 is a valuable tool for infrastructure project delivery. Skilled project management is needed to accrue the full benefits.

It’s three years since NEC published its fourth version of the Engineering and Construction Contract, time enough for the key changes to become embedded in everyday use. The 2017 amendments were largely welcomed, and they brought gender-neutral language and more consistency in the definitions used across the suite. We now also see greater contractual obligation placed on the project manager, with respect to managing the programme.

NEC aims for mutual trust and co-operation

For local authorities, other public sector organisations, and both public and private infrastructure, NEC has become the contract of choice. It’s known for its clarity and fair balance of risk between parties. In particular, the contractual requirement for a formal programme distinguishes NEC4 from other forms of contract.

Spotlight on the programme

The programme requirement under NEC is often described as the ‘beating heart’ of the contract. It performs a dual function: it’s firstly a detailed foundation for managing the work, outlining the way in which the contractor plans to deliver. Secondly, it contractually defines a series of obligations and entitlements.

The contractual force of the programme creates a vital tool that operates in the interests of both parties and underpins collaboration—but this potential is not always fulfilled. There’s often a lack of understanding about the importance of the programme and the benefits of its proper management. These issues have come into sharp focus because of Covid delays and changes, with both clients and contractors losing out if the programme is not correctly understood and managed. Achieving a robust and realistic programme, suitable for acceptance by the project manager, can be problematic, as illustrated below.

Skilled NEC project management will produce the best outcomes and ensure that the contract is being used in the spirit in which it is intended and in the interests of the party being represented—yet maintaining a collaborative relationship with other stakeholders.

Common programme pitfalls

  1. Reduced procurement durations - contractors have insufficient time to understand the requirements, risks and constraints, and to devise a realistic programme. This often produces an over-optimistic programme.
  2. Client time constraints - the client underestimates the time and experience needed to scrutinise, mark and challenge tender returns. They may not appreciate the significance of the inclusion of a Contract Data 2 programme—this becomes the default accepted programme unless challenged.
  3. Project time constraints - timescales set in Contract Data are devised to suit constrained funding dates but are unrealistic for project delivery.
  4. Detailed Scope of Works - lack of detail from the client and/or contractor means that the programme is not populated with sufficient detail. In the case of the contractor, this may be because they’re not fully aware of what should be included or are wary of giving too much detail in case it compromises their position on future programme/specification change.
  5. Programme provisions - lack of understanding of Contract Data 1 and 2, which creates dispute/lack of clarity over the accepted programme. Project managers may be uncertain of their contractual obligations relating to review/acceptance of the programme, but keen to accept something and move forward.
  6. Programme & change - the programme is not adequately developed for administration of compensation events. A lack of understanding from the contractor on their obligation to deal with delay. Provision for the contractor’s mitigating solutions, whether client or contractor-led delay, has not been included.

Skilled NEC Project Manager

Skilled NEC project management will produce the best outcomes and ensure that the contract is being used in the spirit in which it is intended and in the interests of the party being represented—yet maintaining a collaborative relationship with other stakeholders.

Our experience shows that the expertise required is often underestimated. Some clients may need to augment their in-house resource, in situations where they lack the experience or the time to confidently undertake the NEC Project Manager role.

A critical friend

Faithful+Gould is working with the NEC suite on many projects for local authority clients (including North Somerset, Swindon Borough and Cardiff City Councils). We deploy our subject matter experts (civil engineering, highways, rail, infrastructure and property) to ensure that clients’ cost- and time-related objectives are protected. Our aim is to be a critical friend to our client and to the project, and, especially when we are involved at pre-contract stage, to avoid the common pitfalls experienced.

Our team are accredited NEC practitioners and we are also able to offer CPD sessions to clients’ internal teams, enhancing their understanding of the contractual requirements of the NEC client role.   

Written by