A Practical Guide to the NEC3 Engineering and Construction Contract / Edition 1

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Overview

Launched in 1991, the New Engineering Contract (NEC) has become one of the UK's leading standard forms of contract for major construction and civil engineering projects. Currently in the third edition, popularly known as NEC 3, it is a process based construction contract embodying project management best practice, and thus the basic philosophy behind the contract is different to the more adversarial principles and approach of other standard construction contracts.

Written as a practical guide to the application of the procedures contained in NEC 3, this book will aid users in the transition from their use and understanding of the other standard construction contracts to the collaborative project management based approach of the ECC.

Written for anyone working in the construction industry working on a project under the ECC, it will be of interest to the complete construction supply chain including employers, construction professions, contractors and sub-contractors. It will also be of interest to consultants and lawyers advising any of these parties, either in the preparation of contract documentation or the resolution of problem situations which may arise.

  • A practical guide to the application of the procedures contained in the NEC Engineering and Construction Contracts
  • Written specifically for people actually using and administering the NEC contracts – rather than lawyers
  • Covers all the variations created by the Main and Secondary Options
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Editorial Reviews

From the Publisher
"An experienced surveyor and builder now a consultant in Oxfordshire, Rowlinson offers both novice and experienced negotiators a guide to the third edition of the New Engineering Contract Engineering and Construction Contract." (Booknews, 1 June 2011)
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Product Details

  • ISBN-13: 9781444336887
  • Publisher: Wiley
  • Publication date: 4/19/2011
  • Edition number: 1
  • Pages: 320
  • Product dimensions: 6.90 (w) x 9.70 (h) x 1.10 (d)

Meet the Author

Michael Rowlinson MSc, DipArb, MRICS, FCIOB, FCIA, FCICES, is a director of Alway Associates, Construction Contracts & Commercial Consultants based in Banbury, Oxfordshire. He is an experienced construction professional, having qualified initially as a Chartered Quantity Surveyor and later as a Chartered Builder. After over 20 years with private practice and contractors Michael joined Alway Associates in 1998, specialising in Construction Contracts and Law. As part of his work Michael has lectured extensively for the Construction Study Centre and direct for his own clients, predominantly on the NEC suite of Contracts. He has written a number of articles on this suite of contracts which have been published in the Civil Engineering Surveyor and the NEC User Group's Newsletter, as well as on Alway Associates website.
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Table of Contents

1 Introduction 1

1.1 General 1

1.2 Mechanics not law 2

1.3 A simple formula for understanding a contract 2

1.4 Mandatory or discretionary 3

1.5 Conditions precedent 4

1.6 Note on use of upper case in key words and phrases 4

2 Background to the NECECC 5

2.1 The background: First edition 5

2.2 The second edition 6

2.3 The third edition 7

2.4 Endorsement of NEC3 by the Office of Government Commerce 7

2.5 General philosophy: Aims and objectives 8

2.6 Flexibility 8

2.7 Clarity and simplicity 9

2.8 Stimulus to good management 9

2.9 Other characteristics 10

3 The Options: An Overview 13

3.1 General arrangement of the ECC 13

3.2 Other documents referred to 15

3.3 Contract Data 16

3.4 The published documents 16

3.5 Main Options: General outline 17

4 ‘Spirit of Mutual Trust and Cooperation’ 19

4.1 Introduction 19

4.2 Core clause 10.1 19

4.3 What does it mean? 21

4.4 Practical issues 22

5 The Cast of Characters 25

5.1 Introduction 25

5.2 The Employer 25

5.3 The Project Manager 27

5.4 The Supervisor 29

5.5 The Contractor 30

5.6 The Adjudicator 31

5.7 Subcontractors 32

5.8 ‘Others’ 32

5.9 Designers 33

5.10 CDM Coordinator 34

5.11 Principal Contractor 34

5.12 Practical issues 35

6 Communications, Early Warnings and other General Matters 37

6.1 Introduction 37

6.2 Communications: The clause 37

6.3 Communications: Practical issues 38

6.4 Early warnings: The clause 40

6.5 Early warnings: Practical issues 42

6.6 Other matters: The clauses 44

6.7 Other matters: Practical issues 47

7 The Contractor’s Main Responsibilities 49

7.1 Introduction 49

7.2 Providing the Works 49

7.3 Contractor’s design 51

7.4 Other matters 52

7.5 Practical issues 55

8 Subcontracting 59

8.1 Introduction 59

8.2 Definition of a Subcontractor 59

8.3 The core clauses 60

8.4 Provisions in the Main Options 61

8.5 Practical issues 61

8.6 Options for forms of subcontract in the NEC3 family 62

9 Testing and Defects 65

9.1 Introduction 65

9.2 Tests and inspections 65

9.3 What is a Defect? 67

9.4 The Defect procedure 68

9.5 The Defects Certificate 70

9.6 Uncorrected Defects 70

9.7 Practical issues 71

10 Title 73

10.1 Introduction 73

10.2 The core clauses 73

10.3 Practical issues 74

11 Risks and Insurance 77

11.1 Introduction 77

11.2 The core clauses 77

11.3 Practical issues 80

12 Time 85

12.1 Introduction 85

12.2 The programme: Contents 86

12.3 The programme: Submitting, accepting and revising 91

12.4 The programme: Practical issues 93

12.5 Starting and finishing 102

12.6 Other matters 105

12.7 Secondary Options related to Time 108

12.8 Practical issues 110

13 Payment 113

13.1 Introduction 113

13.2 The payment process 113

13.3 Payments in multiple currencies 116

13.4 The amount due and the Price for Work Done to Date 116

13.5 Supporting documents and records 126

13.6 The Contractor’s share 129

13.7 The Contractor’s share: Practical issues 131

13.8 Special provisions for the UK 132

13.9 Related Secondary Options 134

13.10 Practical issues 136

14 The Schedules of Cost Components 139

14.1 Introduction 139

14.2 The Schedule of Cost Components 139

14.3 The Shorter Schedule of Cost Components 144

14.4 Application to Subcontractors 145

14.5 Practical issues 146

15 Compensation Events: Theory and Events 151

15.1 Introduction 151

15.2 The theory 151

15.3 The events 153

15.4 Practical issues 168

16 Compensation Events: Procedures 171

16.1 Introduction 171

16.2 Notification by the Project Manager 172

16.3 Notification by the Contractor and the Project Manager’s reply 175

16.4 Other matters associated with notifying compensation events 178

16.5 Quotations: Substance 180

16.6 Quotations: Submission and reply 182

16.7 Assessments by the Project Manager 186

16.8 Implementing compensation events 188

16.9 Practical issues 189

17 Compensation Events: Assessment 195

17.1 Introduction 195

17.2 Changes to the Prices 196

17.3 Changes to the Completion Date and any Key Dates 200

17.4 Project Manager’s assumptions 203

17.5 Other related matters 204

17.6 Practical issues 206

18 Termination 209

18.1 Introduction 209

18.2 Reasons for termination 209

18.3 Implementing termination 213

18.4 Procedures after termination 214

18.5 Assessing the amount due after termination 215

18.6 Practical issues 217

19 Dispute Resolution 219

19.1 Introduction 219

19.2 Option W1 220

19.3 Option W2 223

19.4 Practical issues 228

20 Secondary Options 231

20.1 Introduction 231

20.2 X2: Changes in the law 231

20.3 X4: Parent company guarantee 232

20.4 X12: Partnering 232

20.5 X13: Performance bond 237

20.6 X17: Low performance damages 238

20.7 X18: Limitation of liability 238

20.8 X20: Key Performance Indicators 239

20.9 Y(UK)3: The Contracts (Rights of Third Parties) Act 1999 240

20.10 Z: Additional conditions of contract 240

20.11 Practical issues 241

21 Completing the Contract Data 243

21.1 Introduction 243

21.2 Purpose and form of the Contract Data 243

21.3 Part One: Data for the core clauses 244

21.4 Part One: Data for the Main Option clauses 248

21.5 Part One: Data for the Secondary Option clauses 249

21.6 Part Two: Data for the core clauses 252

21.7 Part Two: Data for the optional statements 253

21.8 Part Two: Data for Main Options A or B 255

21.9 Part Two: Data for Main Options C, D or E 256

21.10 Practical issues 257

22 The Supporting Documents: Need and Content 261

22.1 Introduction 261

22.2 Works Information 261

22.3 Site Information 270

22.4 Practical issues 271

Bibliography 273

Appendix 1 Tables of Clause Numbers, Case Law and Statutes 275

Appendix 2 Tables of Employer’s, Project Manager’s, Supervisor’s, Contractor’s and Adjudicator’s Actions 285

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