There are two new forms of contract which join the NEC4 suite. They are the Design Build and Operate Contract (DBO). It is intended to provide an integrated whole-life delivery solution by combining design, construction and operations under one contract with one supplier.The other is the Alliance Contract (ALC) which is first being published in consultation form. More radical in outlook it will be a multi-party contract for use by a number of parties including Client, Contractor, Consultants, etc. Each party will share risk and reward and there will be an Alliance Board and an Alliance Manager to administer. It will have a single main option, based on current option E.

What about the Engineering and Construction Contract (ECC)? Changes and new features include:

  • Anti-corruption provisions (Clause 18)
  • Assignment (Assignation in Scotland) (Clause 28)
  • A final accounting procedure (Clause 53) and a requirement for the Contractor to submit an application for payment (Clause 50)
  • Deemed acceptance of the Contractor's Programme (Clause 31)
  • A revamp of Section 8 "Risks and Insurance", now "Liabilities and Insurance" to include specific Contractor liabilities and a conventional waiver of subrogation in relation to insurance policies.
  • Secondary option X15 expanded and amended to place the onus on the Client rather than the Contractor in relation to failures in design
  • Additional secondary option clauses including X8 Undertakings (for which read Collateral Warranties), X10 Information Modelling and X22 Early Contractor Involvement.
  • A dispute escalation procedure involving Senior Representatives; and a new option W3 which provides a Dispute Avoidance Board (for use when the HGCRA 1996 does not apply).

All of the changes and new features are, it is said, a direct result of feedback from industry and lessons learned in the 12 years since NEC3 was published.

Brodies LLP will be discussing NEC4 with Ian Heaphy of the NEC4 Contract Board at our NEC4 Seminars, scheduled to take place in Edinburgh and Glasgow on 14 September 2017. Sign-up details can be found here.