10 Feb 2020

Top tips for NEC success

by Mark Woodward-Smith, Group Managing Director -

In the 25 years since its introduction, the NEC has become the favoured contract on many of the largest infrastructure projects in the UK including the Channel Tunnel Rail Link, Heathrow Terminal 5, 2012 London Olympics, Crossrail, Hinkley Point and HS2. Group Managing Director, Mark Woodward-Smith, provides his top tips for NEC success including some specific tips for the recently published NEC4.

  • Know your contract and make sure you understand the amendments from the standard terms (the Clauses). There are often many of these.
  • Hold a collaborative workshop for the entire delivery team before the project commences.
  • Records, records, records…if it is not written down it did not happen. They will help protect you from disallowed costs and to justify CEQs.
  • Use the NEC subcontract and make sure to pass down the amendments from the main contract, sensibly amended to suit.
  • It is worth spending time and effort on the Accepted Programme. It is a suite of documents, not just a bar chart and the latest version will form the basis for assessing compensation event entitlements…so keep it up to date too.
  • Delays to issuing early warning notices can reduce compensation event entitlements.
  • Use compensation events to increase the value of the project and get “time in the bank” and issue them ASAP – don’t wait the full eight weeks!
  • For Option A, aid your cashflow by including lots of short activities in the activity schedule.
  • Know and understand the Option you are working to and the risks associated.  Cost reimbursable doesn’t mean you will recover every cost allocated to the project.
  • Make sure you have a properly-resourced team.

And here are some specific tips for NEC4:

  • Issue payment applications on time or you will not be due a payment for the last period’s work.
  • Make sure your costs and account are up to date so that you can regularly request agreement of Defined Cost and Disallowed Cost, thereby avoiding a shock and/or dispute at the end of the project.
  • Do remind the Project Manager if they have failed to accept your issued programmes, so as to try to get ‘deemed acceptance’ of them rather than be working to an outdated programme.
  • Ensure your notices are issued promptly so that Compensation Event Quotations can be issued and agreed in time to maximise your recovery.
  • CEQ preparation costs are now either part of Defined Cost or recoverable as a CE in their own right.

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