The NEC Engineering and Construction Contract ( ECC )
The NEC Engineering and Construction Contract ( ECC ) ( antecedently the New Engineering Contract ) has been developed to run into the current and future demands for a signifier of contract to be used in technology and building by and large, which is an betterment on bing standard contracts in a figure of ways.
Aims
The aims for the design of the NEC contracts were to do betterments under three chief headers.
Flexibity:
The ECC is intended
- To be used for technology and building work incorporating any or all of the
traditional subjects such as civil, electrical, mechanical and edifice work.
- To be used whether the Contractor has some design duty, full design
duty or no design duty.
- To supply all the normal current options for types of contract such as competitory stamp ( where the Contractor is committed to his offered monetary values ) , mark contracts, cost reimbursable contracts and direction contracts.
- To be used in the United Kingdom and in other states
All the normally used standard conditions of contract from the assorted sectors of
technology and building have been reviewed in the class of planing the ECC.
Some of their commissariats which were peculiar to peculiar sectors have been omitted were they are better included in the Works Information. Where they are indispensable, they have been included in the ECC itself. For illustration, the demand to do full proviso for off-site industry and testing of work which is characteristic of mechanical and electrical contracts have been included in the ECC.
Clarity and simpleness
Although a legal papers, the ECC is written in ordinary linguistic communication. Equally far as possible, it uses merely words which are in common usage so that it is easy understood by people whose first linguistic communication is non English and that it can easy be translated into other linguistic communications. It has few sentences which contain more than 40 words. By and large, longer sentences have been subdivided utilizing slug points to allow easier apprehension. In the countries of insurance, differences and expiration, some phrases or footings which have a specific legal significance have been retained. It is arranged and organised in a construction which helps the user to derive acquaintance with its contents. More significantly, the actions by the parties which follow from usage of the ECC are defined exactly so that there should be few differences about who is to make what and how. The design of the ECC is based upon flow charts of the processs to be followed by the parties named in the contract. One of the benefits of this attack to drafting has been that chances could be taken for simplifying the construction of the contract every bit good as guaranting that the processs were non unfastened? ended or conflicting. For illustration, about all fortunes which may give rise to extra payment to the Contractor are identified as compensation events. The process for covering with these events is chiefly set out in the nucleus clauses and includes reappraisal of both the cost and clip deductions. This contrasts with traditional signifiers of contract in which the process for compensation is different depending upon the nature of each event.
The initial impact of reading the ECC may non convey its full simpleness, in portion because a figure of freshly defined looks are used. The measure of text used is much less than bing standard signifiers and the sum of text needed to give consequence to the options is little.
The figure of clauses used and the sum of text are less than in many criterion signifiers. The ECC neither requires nor contains transverse mentions between clauses.
A cardinal aim of the ECC is that its usage should understate the incidence of
differences. Therefore words like `fair ‘ , `reasonable ‘ and `opinion ‘ have been used every bit small as
possible. This does non intend that the flexibleness of administrating the contract has been
reduced. For illustration, in most cases where the Project Manager is required to do a determination, the footing of his determination is stated in the contract. This will significantly cut down uncertainness about the result of the contract. This benefits the Contractor without restraining the freedom of action of the Project Manager moving on behalf of the Employer
Stimulation to good
This is possibly the most of import feature of the ECC. Every process has
direction been designed so that its execution should lend to instead than
detract from the effectivity of direction of the work. This facet of ECC is founded upon the proposition that foresighted, co? operative direction of the interactions between the parties can shrivel the hazards built-in in building work. Developments inproject direction techniques and their execution over the past 20 old ages have moved faster than the development of signifiers of contract. With the ECC, it is now possible tobuild agreements for the different parties to lend to the direction of a undertaking upon improved patterns and to actuate all parties, by agencies of the contract, to use such patterns to their work.
In entire, the ECC is intended to supply a modern method for employers, interior decorators,
contractors and undertaking directors to work collaboratively. It besides enables them to accomplish their ain aims more systematically than has been possible utilizing older signifiers of contract. Use of the ECC is intended to take to a much reduced hazard to the Employer of cost and clip overproductions and of hapless public presentation of the completed undertakings. It should besides take to a much increased likeliness of accomplishing a net income for the Contractor, subcontractors and providers.
The two rules on which the ECC is based and which impact upon the aim of exciting good direction are:
foresight applied collaboratively mitigates jobs and psychiatrists hazard, and clear division of map and duty helps answerability and motivates people to play their portion.
A secondary but of import subject is that people will be motivated to play their portion in
collaborative direction if it is in their commercial and professional involvement to make so. Reliance need non be placed upon exhortation either within the contract or outside it. Uncertainties about what is to be done and about how the unexpected arising in the class of building will impact what has to be done are inevitable in building undertakings. The ECC allocates clearly the hazards originating in these ways between the parties. However, its chief undertaking is to cut down the incidence of those hazards by application of collaborative foresight.
In this manner, it aims to better the result of undertakings by and large for parties whose involvements might look to be opposed. The processs in the ECC are designed to excite good direction. Outstanding illustrations of these are the early warning process and the manner in which compensation events are dealt with. Compensation events are events which may take to the payment to the Contractorbeing changed or the Completion Date being delayed.
A rule of the ECC is that the Project Manager, moving on behalf of the Employer and in communicating with him, should be presented with options for covering with the job from which he can take, directed by the involvements of the Employer. The Contractor should be unaffected by the pick made. To accomplish this, the rating of compensation events is based upon a prognosis of the impact which the alteration or job will hold upon the cost to the Contractor of transporting out the work? as prognosis by him at the clip the event is assessed. Where, as is frequently the instance, alternate ways of covering with the job are possible, the Contractor prepares citations for different ways of undertaking the job. The Undertaking Manager selects one on the footing of which will outdo function the involvements of the Employer. In some instances this will be the lowest cost solution, in others it might be the least delay solution.
The alteration to the Monetary values for the work is based upon the citation. The Contractor carries the hazard if his prognosis of cost impact turns out to be incorrect, but the Employer has a steadfast committedness. The hazard to the Contractor of this method of pricing is conceptually similar to the hazard he takes when pricing work at stamp. It is a lesser hazard because he is able to calculate costs much more accurately at the clip that the job is identified than he would hold been able to make at the stamp phase.
This agreement is intended to excite foresight, to enable the Employer to do
rational determinations about alterations to the work with sensible certainty of their cost and clip deductions, and to set a hazard on the Contractor which is tolerable and which motivates him to pull off the new state of affairs expeditiously. An of import by? merchandise is that few issues associating to rating of the work or extensions of clip are left to be settled after the event.
This attack has pervaded the drafting of the ECC and is the footing for most of the
processs which it contains. In planing the ECC, the motive of each party in each action he is to take has been considered against good direction standards. Because this is motive? driven, it does non look in the words of the ECC itself but it is intended to ensue straight from the manner in which the processs are operated.
A typical facet of this feature is the manner in which the ECC makes usage of the
programme for design, building and installing. Many of the elaborate processs rely upon the fact that an up? to? day of the month and realistic programme maintained by the Contractor is used in joint determination? doing between him and the Project Manager. The usage of the programme ( which includes method and resource statements ) is defined in some item and in such a manner that, once more, the Contractor is motivated to maintain it up? to? day of the month and realistic. He is non merely exhorted to make so.
Subcontracts
The ECC has been designed on the premise that work may be subcontracted. A
standard signifier of subcontract called the NEC Engineering and Construction Subcontract ( ECS ) has been published. This is really similar to the ECC but uses appropriate names for the parties and has a little figure of extra commissariats appropriate to a subcontract.
Use of the same text in the chief contract and the subcontract provides certain back? to? back protection for chief contractors utilizing the ECS. It besides has the convenience that Contractors ‘ and Subcontractors ‘ staff do non hold to go familiar with two different sets of text and process. There is nil to forestall a subcontract utilizing a different option from that used in the chief contract. An obvious illustration of this is where the chief contract uses the direction contract option but the subcontract uses one of the more conventional options. Option F ( Management contract ) has non been included in the ECS.
Some other alterations
Two specific alterations from conventional building pattern deserve reference. First, subcontractors can non be nominated. This alteration is made in order to simplify contract agreements and to extinguish the clouding of duties which nomination causes.
Elimination of this clouding should non merely cut down differences but strengthen the motive of the parties to pull off their activities. An Employer who has grounds for utilizing a peculiar contractor for portion of the plants can utilize the ECC for a direct contract alongside other contractors
