Let’s face it. The construction industry is riddled with stories of bad workmanship and unreliable timing plans, which is why the New Engineering Contract (NEC) Family of Standard Form Contracts is so important.
NEC is a family of contracts that improves relationships between employers and contractors. It facilitates the implementation of sound project management principles and defines legal relationships.
It is incredibly flexible and can be used for the procurement of works, services and goods across all sectors. These include; public and private, buildings and infrastructure, plant and equipment – as well as all stages of a project’s lifecycle. From planning, design and project management to construction, maintenance and facilities management, the NEC has you covered.
The three cornerstones the NEC is built on are: On time, on budget and to the highest standards, which makes it widely regarded as international best practice.
Part of its popularity is that it enables a more collaborative partnership between clients and contractors. This means that any potential challenges are addressed early on, before they become large problems. Little to no modification of the contract is needed regardless of whether you’re constructing a building, school, airport or hospital, making it easy to apply.
The implementation of NEC3 contracts has resulted in major benefits for projects both nationally and internationally in terms of time, cost savings and improved quality. In South Africa, NEC has been used extensively since the first edition was launched in 1993. It’s safe to say it’s an industry norm.
There are differences between NEC and traditional contracts, such as on issues of extension, regarding time and cost claims. These were based on actual delays that a project experienced and the subsequent costs that were incurred. The NEC, however, is future-focused and requires an estimated forecast on the costs that may incur to complete the work. These issues need some further looking into but can easily be addressed with additional education and implementation.
At CFC, we support any measures that enhance the safety, transparency and better planning of the construction industry in order to build up its reputation in various sectors.