NEC was first published as a new and innovative way of managing construction contracts in 1993 — some 29 years ago. It was designed to facilitate and encourage effective management of risks, promote professional project management techniques, and uses clear and simple language to do so.
The NEC approach to managing contracts was endorsed in “Constructing the team — The Latham Report”, which was a leading UK government/industry review of procurement and contractual arrangements in the construction industry.
NEC has played a significant part in helping the industry deliver projects better. It has done so by introducing effective project management procedures into the contract itself. These require pro-active management of risk and change, and the day-to-day use of an up-to-date comprehensive programme. The range of pricing options has given clients flexibility in the allocation of risk and the ability to share risk and manage it, collaboratively.
The NEC suite has evolved over three decades, embedding consultation responses and user feedback, and reflecting industry development, including new procurement approaches and management techniques such as alliances, management of information (BIM) and supply chain engagement. This feedback and the new procurement approaches formed the driver for the development of the next generation contracts and the launch of NEC4.
Key objectives in drafting NEC4 included:
- provide greater stimulus to good management,
- support new approaches to procurement which improve contract management, and
- inspire increased use of NEC in new markets and sectors.
Features of NEC4 Construction Contracts include:
- a new design build and operate contract to allow flexibility between construction and operational requirements in timing and extent o a new multi-party alliance contract based upon an integrated risk and reward model
- new forms of subcontract to improve integration of the supply chain
- finalising cost elements during the contract
- incorporating a party-led dispute avoidance process into the adjudication process
- increasing standardisation between construction contracts and
- providing enhanced guidance to give greater practical advice to users
NEC has always been known for its innovative approach to contract management, and this revision continues that approach. No other contract suite has had such a transformative effect on the built environment industry as NEC. It has put the collaborative sharing of risk and reward at the heart of modern procurement. It is also unique in providing a complete, back-to back procurement solution for all works, services and supplies in any sector and any country.
NEC4 continues to set the benchmark for best practice procurement worldwide in construction contracts.