NEC Workshops during Review Phase

Introduction

• Richard Patterson
• Chartered Engineer
• Mott MacDonald Procurement Practice
• 21 years with Mott MacDonald
• Many forms of contract
• 15 years with the NEC – from Yorkshire Water
• NEC3 team
• Now also NEC Consultant
 Objectives

From these Workshops, Mott MacDonald will explain……

1. Basic concepts of NEC
2. Differences in approach between NEC and conventional types of
HKSAR Government contracts
3. Steps and procedures for implementation of NEC over the life of
the Project, PLUS the associated benefits and likely problems
encountered
AND then share…….
4. Past experience of other similar contracts successful in adopting
NEC
 NEC – good management required – by all

• Collaborative mindset
– ‘our’ project
– joint management – rather than ‘stand off’ administration
• especially under target contract options

• One real, visible, updated Accepted Programme

• A timescale for every action
• No surprises: ‘early warning’
• Sort it NOW

Using the contract is a massive

“behavioural” thing
Flexibility – the Engineering and Construction
Contracts (ECC)
additional conditions
jurisdiction-specific options
secondary options
dispute resolution option
payment option

core clauses
 Key “Roles” – Conventional vs NEC

Engineer
to “OUR
“administer contract” PROJECT”

Engineer’s Project Supervisor

Representative Manager to to
“manage “check
contract” works”
Mutual trust +
Cooperation

Contractor Contractor
to to
“execute “execute
contract” contract”

Conventional (Using GCC for Civil NEC

Engineer Works, 1999 Edition)
Contract Document Structure – Conventional vs NEC

ECC Framework

Articles of General & Form of Agreement & Form of Tender

Agreement & Special
Form of Conditions of Core Clauses
Tender Contract
Main / Secondary Options Clause
Schedule of Costs Components

Contract Data Part One

General & Contract Data Part Two

Drawings Particular Works Information
Specification including Specification and Drawings
Site Information
Bills of
Quantities Other Documents:
or Schedule Programme,
of Rates Performance Bond/Parent Company
Guarantee, Activity Schedule

Conventional (Using GCC for Civil

Engineer Works, 1999 Edition) NEC
 Option C or D – Target Cost Contracts

• Project adequately defined to establish target

• Target cost set by activity schedule (Option C) or bill of quantities
(Option D)
• Target moves with compensation events (Options C and D) and
remeasurement (Option D)
• Option D – work remeasured so Employer retains risk of errors in
the BoQ
• Contractor tenders fee percentage (2 types)
• Contractor recovers Defined Cost + Fee
 Option C or D – Target Cost Contracts
“Gain / Pain” Share
share share

Contractor
percentage ranges
100%
120%
tendered 50% “pain”
the Prices – the moving target!
total of the
100%
Prices 35%
“gain”
80%
amount
compensation

Employer
events 0%

Price for Work

Done to Date
(PWDD) Contractor’s share

time Completion
Support from NEC Users’ Group

• Very few clients choose NEC,

then go back
• NEC Users’ Group > 500
members and growing fast -
internationally
• Mott MacDonald is 004!
 Mott MacDonald’s NEC Success

Mott MacDonald has successful experience in the use of NEC Contracts…

• Yorkshire Water / J N Bentley Limited
– Using NEC Option C
– Integrated Design-Build Contractor, Mott MacDonald Bentley as the best
performing “Capital Solutions Partner”
• The Highway Agency
– Early Contractor Involvement
• Anglian Water Special Projects, Biosolids
– Collaborative Team with Anglian Water, Contractors and Mott MacDonald
incentivised to beat whole life cost targets
www.mottmac.com