NEC4 January 2019 amendments - what has changed?

The NEC drafting committee has recently published a set of amendments to the NEC4 suite of contracts following discussion and feedback from the industry. Although published in March, the amendments are called the "January 2019 amendments". The amendments apply to the NEC4 June 2017 edition contracts and follow the philosophy of "evolution not revolution" by bringing some clarity to certain clauses but not creating radical change.

The NEC has published a detailed list of amendments together with an explanatory note. A number of the revisions are to correct minor typographical or stylistic details. Among the amendments are the following key changes:

ECC Clause 63.5 _ Assessing compensation events ("CEs")

The NEC published a practice note in October 2017 which provided guidance to Project Managers on how to assess CEs. The practice note outlines that events which have happened between the date of the Accepted Programme and the dividing date for the CE (such as other CEs, CEs already in the Accepted Programme or other causes of delay) should be taken into account when assessing a CE. To incorporate this good practice into clause 63.5, the third paragraph has been replaced with:

"The assessment takes into account

• any delay caused by the compensation event already in the Accepted Programme and
• events which have happened between the date of the Accepted Programme and the dividing date."

This is intended to provide clarity and gives contractual force to the practice note ensuring that other events which have occurred since the Accepted Programme are taken into account in the assessment.

ECC Clause 90.2 _ Termination Table

The procedures relating to termination by the Client for reason R17 (where parties have been released under law) and R20 (where an instruction to (re-)start work or de-scope has not been given in 13 weeks and the rest of clause 91.6 is inapplicable) have been amended to bring the procedure in line with those that apply in the event of termination by the Contractor for the same reasons.

ECC Options C, D, E and F clause 50.9 _ Agreement of Defined Cost

The amendments to clause 50.9 provide both parties with greater clarity by making it clear that it relates to the finalisation of the Defined Cost for part of the works.

ECC Options W1 and W2 _ Senior Representatives

The NEC4 contracts provide for a Senior Representative to be defined in the Contract Data. The January 2019 amendments now allow one party to unilaterally replace a Senior Representative following notification to the other party of the name of the replacement.

ECC Clause X15.6 _ Certificate of Insurance

The Contractor is required to submit to the Project Manager for acceptance a certificate showing that the insurance required in respect of the Contractor's Designed works is in force. The must be submitted before the starting date and on each renewal until the end of the period stated in the Contract Data.

PSSC _ The Consultant's Contract Data - People Rates

The Contract Data of the Professional Services Short Contract (PSSC) has been amended to clarify that the Client must choose between works undertaken on a time charge basis and on a rates and lump sum basis. The contract does not allow for a mixture of both.

Project Bank Account

Option Y(UK)1 contains a form of Trust Deed and Joining Deed for Project Bank Account. The January 2019 amendments remove these standard forms from the subcontracts and instead the documents under the main contract will be used. The Contract Data now identifies the applicable Trust Deed and Joining Deed.

Summary

The improvements made by the January 2019 amendments are not radical but they are welcomed to encourage industry best practice and to help clarify certain matters that have been the subject of debate in the industry.

A schedule of amendments is available to reflect these changes and new NEC4 contracts will be printed with the amendments included. You should consider whether these amendments are appropriate to include as part of any new contracts when issuing tenders or negotiating terms.