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The Contractor's NEC3 EEC Handbook (eBook)

Steven C. Evans

ISBN13: 9781119137528
Published: August 2017
Publisher: Wiley-Blackwell
Country of Publication: UK
Format: eBook (ePub)
Price: £67.95
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9781119137498
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Written in plain English for contractors and their staff, this book explains how the NEC3 contract works and provides answers to common questions. It presents complicated concepts in a simple, straightforward and understandable way, focusing mainly on day-to-day use. Steven Evans, an expert with thirty years of experience in construction, considers all the provisions of the contract and explains the procedures, obligations, and liabilities contained within it. 

NEC3 ECC is a process-based contract based on project management best practices. The basic philosophy behind it differs radically from the more adversarial approaches embodied by traditional contracts. While the NEC3 ECC may appear quite simple on the surface, it is often misunderstood and mismanaged by its day-to-day users. Despite the clear and urgent need for expert guides for those who use the NEC3 ECC, or who are considering adopting this increasingly popular contract, available books on the subject are highly technical and written for lawyers and professional consultants—until now. Written specifically for contractors using the NEC3 ECC contract, this book is aimed specifically at a level consistent with the knowledge and experiences of contractors and their staff.

  • A practical guide to the procedures in the NEC3 Engineering and Construction Contracts
  • Written specifically for those using and administering the contracts—not for lawyers or professional consultants
  • Considers all the provisions of the contract and explains the procedures, obligations and liabilities
  • Covers all NEC3 ECC versions and variations created by the Main and Secondary Options
  • Provides clear, concise, practical, and straightforward explanations of the NEC3 ECC form used by commercial and operational staff of main contractors
The Contractor's NEC3 EEC Handbook is a vital working resource for main contractors and their employees, including quantity surveyors, commercial managers, contracts managers, project managers, site managers, and estimators.

Subjects:
Construction Law, eBooks
Contents:
About the Book xiii
About the Author xv
1. Introduction 1
Ten Things You Need to Know 1
Author’s Note 2
2. The Contract 5
About the NEC Contract 5
Clarity and Simplicity 5
Flexibility 5
Stimulus to Good Management 6
Collaborate…or Else! 6
The Latham Report 6
The NEC3 Suite 7
Contracts 7
Flow Charts and Guidance Notes 8
The ECC Form 9
The Core Clauses 9
The Main Options 9
Option A – Priced Contract with Activity Schedule 10
Option B – Priced Contract with Bill of Quantities 11
Option C – Target Contract with Activity Schedule 11
Option D – Target Contract with Bill of Quantities 12
Option E – Cost Reimbursable Contract 12
Option F – Management Contract 13
W Clauses 13
The Secondary Options 14
X Clauses 14
Y Clauses 14
Z Clauses 15
The Contract Data 15
The Schedules 16
The Schedule of Cost Components 16
The Shorter Schedule of Cost Components 16
Formation of the Contract 16
Offer and Acceptance 16
Attestation 17
Necessary Contract Documents 17
Frequently Asked Questions 17
3. General 19
Overview 19
Actions 19
The Employer 20
The Contractor 22
The Project Manager 27
Impartiality 32
The Supervisor 32
The Obligations 33
Identified and Defined Terms 34
(1) The Accepted Programme 35
(2) Completion 36
(3) Completion Date 38
(4) The Contract Date 38
(5) Defect 39
(6) Defects Certificate 39
(7) Equipment 40
(8) The Fee 40
(9) Key Date 41
(10) Others 42
(11) Parties 42
(12) Plant and Materials 42
(13) To Provide the Works 43
(14) The Risk Register 44
(15) The Site 44
(16) Site Information 45
(17) Subcontractor 45
(18) Working Areas 46
(19) Works Information 46
(20) The Activity Schedule (Main Options A and C Only) 49
Who Prepares the List of Activities? 49
What Should be Included in the Schedule? 50
Relationship to the Accepted Programme 50
Changes to the Activity Schedule 50
Use Under Option A 51
Use Under Option C 51
Errors in the Activity Schedule 51
(21) The Bill of Quantities (Main Options B and D Only) 52
Changes to the Bill of Quantities 53
Use Under Option B 53
Use Under Option D 53
Errors in the Bill of Quantities 54
 (22) to (26) Defined Cost 54
Main Options A and B 54
Main Options C to E 54
Main Option F 55
(25) Disallowed Costs 55
(27) Price for Work Done to Date (Option A) 56
(28) Price for Work Done to Date (Option B) 56
(29) Price for Work Done to Date (Options C to F) 57
(30) Prices (Main Options A and C) 57
(31) Prices (Main Options B and D) 57
(32) Prices (Main Options E and F) 57
(33) The Total of the Prices (Option D) 57
Interpretation and the Law 57
Communications 58
Notification 59
The Project Manager and the Supervisor 60
Adding to the Working Areas 61
Early Warning 61
Ambiguities and Inconsistencies 63
Illegalities and Impossibilities 64
Prevention 64
Frequently Asked Questions 65
4. The Contractor’s Main Responsibilities 71
Overview 71
Providing the Works 77
The Contractor’s Design 78
Acceptance of the Contractor’s Design 78
Using the Contractor’s Design 79
Design of Equipment 79
People 80
Working With the Employer and Others 81
Subcontracting 82
Other Responsibilities 84
Frequently Asked Questions 85
5. Time 89
Overview 89
Starting, Completion and Key Dates 89
Commencement and Completion 89
Completion Certificate 90
Key Dates 91
The Programme 91
The First Programme 92
Information on the Programme 92
Acceptance of the Programme 95
Rejection of the Programme 95
Revising the Programme 96
Access to and Use of the Site 98
Instructions to Stop or Not to Start the Work 98
Takeover 98
Acceleration 99
Frequently Asked Questions 100
6. Testing and Defects 105
Overview 105
Tests and Inspections 106
Tests and Inspections Before Delivery 107
Searching For and Notifying Defects 107
Searching 107
Notifying 108
Correcting Defects 108
Correction 108
Defect Correction Period 108
Defects Certificate 109
Accepting Defects 109
Uncorrected Defects 110
Frequently Asked Questions 111
7. Payment 115
Overview 115
Assessing the Amount Due 115
Main Option A 116
Main Option B 117
Main Option C 117
Amounts Due to Subcontractors 118
The Cost of Components in the Schedule of Cost Components 119
Disallowed Costs 119
The Fee 120
Main Option D 120
Amounts Due to Subcontractors 121
The Cost of Components in the Schedule of Cost Components 121
Disallowed Costs 121
The Fee 122
Main Option E 122
Amounts Due to Subcontractors 123
The Cost of Components in the Schedule of Cost Components 124
Disallowed Costs 124
The Fee 125
Main Option F 125
Amounts Due to Subcontractors 126
The Prices for the Work Done by the Contractor 127
Disallowed Costs 127
The Fee 127
Unfixed Materials on Site 128
Main Option A 128
Main Option B 128
Main Options C, D and E 128
Main Option F 128
The First Programme 128
Payment 128
The Primary Legislation 129
The Secondary Legislation 129
How it Works 129
A ‘Construction Contract’ 129
The Payment Provisions 130
The Payment Notice 130
The ECC Provisions 131
Interest 132
Defined Cost 132
The Contractor’s Share 133
The Activity Schedule 134
The Bill of Quantities 135
Frequently Asked Questions 135
8. Compensation Events 139
Overview 139
Compensation Events 140
Core Clause Compensation Events 140
Weather Measurement 146
Weather Data 146
Once in Ten Years 146
Bill of Quantity Compensation Events 149
Secondary Option Compensation Events 150
Clause X2.1 – Changes in the Law 150
Clause X12.3(6) and (7) – Changes in Partnering Information 151
Clause X14.2 – Delay in Making Advanced Payment 151
Clause X15.2 – Correction of a Defect 151
Clause Y2.4 – Suspension Under the Housing Grants,
Construction and Regeneration Act 1996 151
Compensation Event Procedure 151
Notifying Compensation Events 151
Quotations for Compensation Events 154
Assessing Compensation Events 156
Effect of the Event on Defined Cost 157
Effect of the Event on Planned Completion 158
Failure to Give Early Warning 159
The Project Manager’s Assessment 159
Exhaustive Remedy 161
Implementing Compensation Events 161
Main Option Clauses 161
Summary of Sanctions 163
Other Remedies 164
Frequently Asked Questions 164
9. Title 169
Overview 169
The Employer’s Title to Plant and Materials 169
Marking Equipment, Plant and Materials Outside the
Working Areas 170
Removing Equipment 171
Objects and Materials within the Site 171
Frequently Asked Questions 171
10. Risks and Insurance 173
Overview 173
Employer’s Risks 173
Contractor’s Risks 174
Repairs 175
Indemnity 175
Insurance Cover 175
Insurance Policies 176
If the Contractor Does Not Insure 176
Insurance by the Employer 177
Frequently Asked Questions 177
11. Termination 179
Overview 179
Termination 179
Reasons for Termination 180
Procedures on Termination 181
Payment on Termination 181
Frequently Asked Questions 183
12. Dispute Resolution (W1 and W2 Adjudication) 185
Overview 185
Option W1 185
Dispute Resolution 185
The Adjudicator 186
The Adjudication 188
Review by a Tribunal 191
Option W2 192
Dispute Resolution 192
The Adjudicator 193
The Adjudication 196
Review by a Tribunal 199
Frequently Asked Questions 200
13. X and Y Clauses 203
Introduction 203
The X Clauses 203
X1 – Price Adjustment for Inflation 203
X2 – Changes in the Law 204
X3 – Multiple Currencies 204
X4 – Parent Company Guarantees 205
X5 – Sectional Completion 205
X6 – Bonus for Early Completion 205
X7 – Delay Damages 206
X12 –
Partnering 206
X13 – Performance Bond 207
X14 – Advanced Payment to the Contractor 207
X15 – Limitation of Contractor’s Liability for his Design to Reasonable Skill and Care 207
X17 – Low Performance Damages 208
X18 – Limitation of Liability 208
X20 – Key Performance Indicators 209
The Y Clauses 209
Y(UK)1 – Project Bank Account 209
Overview 209
Definitions 210
Project Bank Account 210
Named Suppliers 210
Payments 211
Effect of Payment 211
Trust Deed 211
Termination 211
Y(UK)2 – Housing Grants, Construction and Regeneration Act 1996 212
Overview 212
Definitions 212
Dates for Payment 212
Notice of Intention to Pay Less 212
Suspension of Performance 212
Y(UK)3 – Contracts (Rights of Third Parties) Act 1999 213
Overview 213
Frequently Asked Questions 213
14. Z Clauses 215
Overview 215
Additional Conditions of Contract 215
Frequently Asked Questions 216
15. Schedules of Cost Components 219
Overview 219
Schedule of Cost Components 219
Subcontractors 220
People 220
Equipment 220
Plant and Materials 221
Charges 222
Manufacture and Fabrication 222
Design 222
Insurance 222
Shorter Schedule of Cost Components 223
Subcontractors 223
People 223
Equipment 224
Plant and Materials 225
Charges 225
Manufacture and Fabrication 225
Design 225
Insurance 226
Frequently Asked Questions 226
Index 229