A COMPARISON BETWEEN THE THREE TYPES OF EPC CONTRACTS

Price

JCT CONTRACT
The JCT Contract is a

NEC CONTRACT
NEC Option B offers a

fixed price lump sum

fixed price lump sum

contract.

contract but Options C

and D are target cost

Provisional sums

The JCT Contract

contracts.
whilst the NEC Contract

contains provisional

does not.

sums,
Cost Scrutiny

Ground Risk

In a JCT Contract there

The NEC Contract has

may be some cost

an open book procedure

scrutiny via the contract

with the key concepts of

sum analysis and tender

defined cost and

negotiations

disallowed cost.

In the JCT Contract

However, the NEC

ground risk is with the

Contract uses the ICE

contractor.

forseeability test in
relation to ground

The Programme

The JCT Contract does

conditions.
The programme is at the

not have a programme as

heart of the NEC ethos.

a contractual document.

It is a contractual

allowances.

document and to be
regularly updated. The
NEC Contract also has
key concepts such as
float, completion float
and time risk

Payment

the JCT Contract

In relation to the NEC

1

payment section is clear,

Contract it is located in

is all in one section

three different locations

(clause 4) and easy to

clause 5, Y(UK)2 and

follow

Contract Data Part 1.

Extension of time

In relation to extensions

The NEC Contract has

and money

of time and loss and

the compensation event

expense, the JCT

and it deals with both

Contract has relevant

time and money. The

matters and relevant

ethos of compensations

events and time and

events is that they are

money are dealt with as

dealt with in real time as

separate concepts.

much as possible and

this is very much
process driven. The
compensation events
also have a condition
precedent nature, and
failure to notify the
compensation event
within the 8 week period
can have dire
consequences.

Insurance

The JCT Contract

In relation to the NEC

contains comprehensive

Contract, the insurance

detail in relation to

detail is very brief and

insurances at clause 6

contained at clause 84 of

and Schedule 3.

the contract. The NEC

Contract is silent on
some insurances. The
missing insurances
2

relate to existing
buildings insurance and
adjacent property
insurance, and need to
be included in the
additional insurances
section of the Contract
Design Risk

The JCT Contract has a

Data Part 1.
The NEC Contract

clear interaction between

however simply states a

the Employers

contractor is to design

Requirements and

the parts of the works

Contractors Proposals

which the Works

and there is extensive

Information states he is

drafting in the JCT.

to design. The Works

Information contains far
more than Employers
Requirements. There is
guidance as to what the
Works Information
should contain and it is
dangerous and bad
practice to simply rebadge a JCT Employers
Requirements document
as an NEC Works
Information document.

JCT Contract Administrator

NEC Project Manager

Overall

Administers the contract and attempts to

assure the contract sum by ensuring that the
contractor complies with its instructions

Performs proactive administration

requiring skilled judgement

Collaborative role with the employer and

Has wider powers when acting as employer's

contractor including prescribed

agent

communication routes

In certain instances, contractual provisions

Acts in a spirit of mutual trust and co-

can be subject to 'fair and reasonable'

operation with the employer, contractor

assessment

and supervisor (condition 10.1)

Quality Control

Issues timely information relating to set out

Acts as gatekeeper to contractor's design

and any other pre-agreed information as and

and programme forming part of the

when required.

contract and use of sub-contractors.

Considering and accepting the contractor's
design if any (conditions 21-23), any subcontractors (condition 26) and the
proposed programme (condition 31)

Replies within the period for reply to any

communication submitted to it by the
contractor

Issues certificates to the employer and

contractor

Operates the early warning mechanism by

notifying the contractor of any increase,
delay or impairment to performance,
entering such instances in the risk register,

JCT Contract Administrator

NEC Project Manager

attending risk reduction meetings and
making decisions and finding solutions
with others to overcome those risks
(condition 16)

Issues instructions dealing with acts of

prevention (condition 19)

Variations

Issues instructions/variations to overcome

discrepancies and/or changes in scope of

works

Issues instructions relating to changes in

scope and completion date

Actively monitors by means of an early

Issues notices in respect of remedying

warning mechanism for any change to

discrepancies between contract documents

scope, price, timings or impairment of

(clauses 2.13-2.18)

performance

Time and Money

Certifies sums due

Certifies sums due

Assesses delay and grants time and cost relief

Decides the date of completion and

according to prescribed provisions but subject

to overriding power to grant time relief as is
fair and reasonable immediately following

certifying completion (condition 30)

any claim for a compensation event and

practical completion

requests quotations for any proposed

Issues extensions of time which it considers

fair and reasonable and reaches a decision as
soon as reasonably practical (clause 2.28.2)

Notifies the contractor of the outcome for

instruction or changed decision

Assesses the additional cost of the

contractor not achieving a key date

Considers with the QS, if employed, all

(condition 25.3)

interim valuations, claims for variations and

loss/expense resulting and issue payment
5

Considers compensation events, their

JCT Contract Administrator

NEC Project Manager

certificates as appropriate

value and instructing their implementation

(conditions 60-65)

Practical completion and snagging

Determines when practical completion

achieved and issues notices of non-

achieved

completion, defects and can allow early

possession.

Issues practical completion certificate or

2.30-2.32) or a non-completion certificate
(clause 2.31)
After practical completion, immediately
considers the overall position on extensions of
time and exercises discretion as to whether
any further adjustment to time should be made

Assesses defects and their value

(conditions 40-45).

sectional completion certificates (clauses

Determines when practical completion

Address any actual or suspected defects and

exercises its power to specify and require
remedial action arising during the rectification
period, preparing both a schedule of defects
(clause 2.38.1) and by issuing instructions for
individual defects (clause 2.28.2) and/or
making an adjustment to the contract sum if
the employer agrees that any defects may
remain.

Gary Lightbody the bear and the maiden fair.