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- Herausgeber: John Wiley & Sons
- Kategorie: Wissenschaft und neue Technologien
- Sprache: Englisch
Currently in its third edition, the NEC suite has become one of the UK’s leading families of standard forms of contract for major construction and civil engineering projects. Part of the NEC suite, the Professional Services Contract (PSC) was drafted with the same process-based approach and objectives, offering a standard contract for the appointment of consultants providing professional services in an engineering or construction project. Embodying best practice in terms of project management, the basic philosophy of the PSC differs from the principles and approach of other standard contracts used to appoint consultants.
This book is a practical guide to the application of the PSC. Starting with a brief discussion of the background and philosophy behind the PSC, it identifies the roles and responsibilities of each of the named functions within the contract, explains the approaches required to achieve a successful working relationship between all parties, and examines all the procedures in the PSC. The book explains the links between the various sections of the contract to assist the reader with cross referencing, and covers all the variations created by the Main and Secondary Options. As a very practical guide it will aid users in the transition from their use and understanding of the other standard contracts to the collaborative project management-based approach of the PSC.
Written for anyone working in the construction and related industries using the PSC to procure or provide consultancy services in relation to a construction project, it will be of interest to the complete construction supply chain, particularly architects, structural engineers, services (M&E) engineers, civil engineers, quantity surveyors and interior designers, together with Contractors and Sub-Contractors who have a design liability and employ consultants to assist them. It will also be of interest to consultants and lawyers advising any of these parties, either in the preparation of contract documentation or the resolution of problem situations which may arise.
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Contents
Chapter 1 Introduction
1.1 General
1.2 Mechanics not law
1.3 A simple formula for understanding a contract
1.4 Mandatory or discretionary
1.5 Conditions precedent
1.6 Note on use of upper case in key words and phrases
Chapter 2 Background to the NEC Family of Contracts
2.1 The background: First editions
2.2 The second edition
2.3 The third edition
2.4 Endorsement of NEC3 by the Office of Government Commerce
2.5 General philosophy: Aims and objectives
2.6 Flexibility
2.7 Clarity and simplicity
2.8 Stimulus to good management
2.9 Other characteristics
Chapter 3 The Options: An Overview
3.1 General arrangement of the PSC
3.2 Other documents referred to
3.3 Contract Data
3.4 The published documents
3.5 Main options: General outline
Chapter 4 ‘Spirit of Mutual Trust and Cooperation’
4.1 Introduction
4.2 Core clause 10.1
4.3 What does it mean?
4.4 Practical issues
Chapter 5 The Cast of Characters
5.1 Introduction
5.2 The Employer
5.3 The Employer’s Agent
5.4 The Consultant
5.5 The Adjudicator
5.6 Subconsultants
5.7 ‘Others’
5.8 CDM Coordinator
5.9 Principal Contractor
5.10 Practical issues
Chapter 6 Communications, Early Warnings and other General Matters
6.1 Introduction
6.2 Communications: The clause
6.3 Communications: Practical issues
6.4 Early warnings: The clause
6.5 Early warnings: Practical issues
6.6 Other matters: The clauses
6.7 Other matters: Practical issues
Chapter 7 The Parties’ Main Responsibilities
7.1 Introduction
7.2 The Employer’s obligations
7.3 The Consultant’s obligations
7.4 Other matters
7.5 Practical issues
Chapter 8 Subconsulting
8.1 Introduction
8.2 Definition of a Subconsultant
8.3 The core clauses
8.4 Provisions in the main options
8.5 Practical issues
8.6 Using the PSC as a Subcontract
Chapter 9 Quality
9.1 Introduction
9.2 Quality management system
9.3 What is a Defect?
9.4 The Defects procedure
9.5 Uncorrected Defects
9.6 Practical issues
Chapter 10 Rights to Material
10.1 Introduction
10.2 The core clauses
10.3 Secondary option X9
10.4 Practical issues
Chapter 11 Indemnity, Insurance and Liability
11.1 Introduction
11.2 The core clauses
11.3 Secondary option X18: Limitation of liability
11.4 Practical issues
Chapter 12 Time
12.1 Introduction
12.2 The programme: Contents
12.3 The programme: Submitting, accepting and revising
12.4 The programme: Practical issues
12.5 Starting and finishing
12.6 Other matters
12.7 Secondary options related to Time
12.8 Practical issues
Chapter 13 Payment
13.1 Introduction
13.2 The payment process
13.3 Payments in multiple currencies
13.4 The amount due and the Price for Services Provided to Date
13.5 Supporting documents and records
13.6 The Consultant’s share
13.7 The Consultant’s share: Practical issues
13.8 Special provisions for the UK
13.9 Related secondary options
13.10 Practical issues
Chapter 14 Compensation Events: Theory and Events
14.1 Introduction
14.2 The theory
14.3 The events
14.4 Practical issues
Chapter 15 Compensation Events: Procedures
15.1 Introduction
15.2 Notification by the Employer
15.3 Notification by the Consultant and the Employer’s reply
15.4 Other matters associated with notifying compensation events
15.5 Quotations: Substance
15.6 Quotations: Submission and reply
15.7 Assessments by the Employer
15.8 Implementing compensation events
15.9 Practical issues
Chapter 16 Compensation Events: Assessment
16.1 Introduction
16.2. Changes to the Prices
16.3 Changes to the Completion Date and any Key Dates
16.4 Employer’s assumptions
16.5 Other related matters
16.6 Practical issues
Chapter 17 Termination
17.1 Introduction
17.2 Reasons for termination
17.3 Secondary option X11: Termination by the Employer
17.4 Implementing termination
17.5 Procedures after termination
17.6 Payment on termination
17.7 Practical issues
Chapter 18 Dispute Resolution
18.1 Introduction
18.2 Option W1
18.3 Option W2
18.4 Practical issues
Chapter 19 Secondary Options
19.1 Introduction
19.2 X2: Changes in the law
19.3 X4: Parent company guarantee
19.4 X8: Collateral warranty agreements
19.5 X12: Partnering
19.6 X13: Performance bond
19.7 X20: Key Performance Indicators
19.8 Y(UK)3: The Contracts (Rights of Third Parties) Act 1999
19.9 Z: Additional conditions of contract
19.10 Practical issues
Chapter 20 Completing the Contract Data
20.1 Introduction
20.2 Purpose and form of the Contract Data
20.3 Part One: Data for the core clauses
20.4 Part One: Data for the main option clauses
20.5 Part One: Data for the secondary option clauses
20.6 Part Two: Data for the core clauses
20.7 Part Two: Data for the optional statements
20.8 Practical issues
Chapter 21 The Supporting Documents: Need and Content
21.1 Introduction
21.2 Scope
21.3 Practical issues
Bibliography
Further Reading
Appendix 1 Tables of Clause Numbers, Case Law and Statutes
Appendix 2 Tables of Employer’s, Consultant’s and Adjudicator’s Actions
This edition first published 2012© 2012 John Wiley & Sons, Ltd
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Library of Congress Cataloging-in-Publication Data
Rowlinson, Michael.A practical guide to the NEC3 professional services contract / Michael Rowlinson.p. cm.Includes bibliographical references and index.
ISBN 978-0-470-67234-1 (hardcover : alk. paper) 1. NEC Contracts. 2. Civil engineeringcontracts–Great Britain. 3. Architectural contracts–Great Britain. I. Title.KD1641.R695 2012343.4107′8–dc23
2011050467
A catalogue record for this book is available from the British Library.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.
Cover design by Workhaus
Chapter 1
Introduction
1.1 General
In writing this guide I have set out to provide a view, much of it personal, as to how to get the most out of the 3rd edition of the New Engineering Contract Professional Services Contract (NEC Panel, 2005a). It is no secret that I am a fan of the family of contracts that the PSC is a member of and, as a result, may be willing to overlook what many perceive as faults or weaknesses. In this guide I have tried to identify and suggest ways in which the procedures and aims of the Professional Services Contract can be simplified so that users do not become unnecessarily bogged down in procedure, but instead concentrate on achieving the goals of the PSC. This guide therefore goes through the procedure in detail as intended by the relevant clauses, but concentrates on practical issues to provide suggestions which the parties can use to achieve the overall intent and spirit of the PSC and to reach the common goal.
With this guide, you get what it says on the cover: a practical guide to the NEC3 PSC Form of Contract. It is a guide to provide users of the PSC, both novice and experienced, with a view of all of its various philosophies, principles, mechanisms and vagaries. The reader will be guided through the contract in a manner that will enable him or her to use this guide for reference without necessarily having to read it all: in other words, a practical guide rather than a stuffy text book. That said, there will be an amount of cross-referencing between sections in order to avoid repetition; users will need to follow these references to find more detailed supporting guidance to particular issues. One area that is not cross-referenced is the term ‘spirit of mutual trust and cooperation’ as found in clause 10.1 of the PSC, although used extensively throughout the guide. If users are uncertain of the meaning of this phrase, then they need to re-read Chapter 4.
To assist the reader in finding where any particular clause, related legal case or UK statute is referred to in the text, a comprehensive index of such references is included in Tables A1.1– A1.3 in Appendix 1.
The more I have worked with this contract over the years, the more I have come to think of it not as a contract but as a Project Management Procedures Manual. This should not be a surprise as the original contract was drafted by project managers for construction professionals (and not by lawyers for other lawyers and judges). That I refer to a contract for professional services in terms of a Project Management Procedures Manual means that those professionals who may work with this contract perhaps need to consider how they manage their relationship with their employer. This approach is different to that which many professionals will be used to in respect to their own appointment. They will find it is much more closely related to construction contracts than other forms of consultancy agreements.
Nevertheless, we must not lose sight of the fact that the PSC is a contract and, as such, legally binds those parties that enter into a contract incorporating these standard terms.
1.2 Mechanics not law
Being a practical guide, this book considers the mechanics of the contract and not of the law. As a practising construction professional, I am interested in the successful outcome of the project for all parties involved at whatever level of the project supply chain. From my point of view, the employing organisation should get what it wants in terms of a project finished on time, to the required quality and within budget (providing, of course, that the budget was reasonable in the first place). The consultants should be recognised for their contribution, whether design, management or commercially orientated, and be paid a reasonable fee for the service they provide. The contractors and subcontractors who carry out the work should be allowed to work efficiently, be recognised as having contributed to the project and make a profit.
Only those projects that satisfy all of the above criteria should be considered as being successful. Every organisation, whether a company, partnership or individual who is involved in a project, has its own needs and goals from that project. A good project will recognise this simple fact of business. It is when all the parties involved recognise each other’s business goals (see Section 4.4.3) from the project, and work to align these goals, that success is achieved for all. As soon as one of the organisations involved feels dissatisfied, then the seeds of a dispute have been sown. As the industry knows, such seeds germinate easily and freely; once they appear on a project they can spread faster than any invasive weed.
Following on from the earlier editions, the PSC is drafted to impose the best practices within project management on the parties with the goal of avoiding disputes. It is the mechanics of these procedures and how to make them work effectively that is the focus of this guide.
As a consequence the guide does not consider the law in relation to the PSC except where reference is needed to explain why something is included or to confirm that, in relation to the law in the United Kingdom, those requirements have been complied with by the PSC (or not as the case may be).
1.3 A simple formula for understanding a contract
Let’s face it: all contracts are confusing when you first try to work out what it all means. I picked up a simple formula for considering contracts many years ago from an experienced Chief Quantity Surveyor of a contracting organisation, who came to my then local centre of The Chartered Institute of Building to give an evening talk on Joint Contracts Tribunal (JCT) Contracts. It didn’t matter that he was talking about JCT Contracts. What I took away from that talk was a formula which I still use today in relation to any contract or procedural document that I encounter; this formula holds good in all such situations. I still have the piece of paper on which I noted the few words I needed to remind me of what to do. I rarely look at that piece of paper now as the formula has become second nature to me in relation to every contract or set of procedures which I read.
The formula is in two parts. The first part can be remembered by four words: WHO, WHAT, WHEN and HOW.
To expand, a contract is a document which sets out the rights and obligations of the parties to that contract, no matter what the contract is for. In the construction and related industries such contracts cover (usually by necessity) a range of extensive rights and obligations for both parties, how such rights and obligations are to be administered and the involvement of agents to carry out specified duties for one or both of the parties. WHO, the first of our four key words, relates to the administration of these rights and obligations. The WHO in the PSC will be one of the four named persons including the Employer, the Employer’s Agent (if employed), the Consultant or the Adjudicator. The specific roles of these individuals are covered in detail in Sections 5.2–5.5.
By its processes and procedures, the PSC sets out WHAT must or may be done in the event that a certain circumstance arises. The WHAT will involve the WHO doing something as set out in the contract.
WHEN that something is to be done is also set out by the contract. In the case of the PSC, the timetable for WHEN these things shall be done is clear and forms a key part of the processes and procedures under the contract. Failure to comply with these processes and procedures in accordance with the requirements specified by WHEN can result in a right being forfeited because of this failure.
Finally, the PSC sets out HOW the process or procedure shall be carried out. Again the PSC is prescriptive as to the HOW, although much of the HOW is set out in general terms that apply across all of the subsequent detailed processes and procedures.
To summarise, the first part of the formula (which holds good for all contracts and not just the PSC) is to consider WHO does WHAT, WHEN they do it and HOW it is to be done. Understanding these things is important as the PSC creates what are known in legal circles as conditions precedent. Although the English Courts do not like such provisions, they can be effective if drafted in certain terms (for further comment on conditions precedent see Section 1.5 below).
When dealing with specific processes and procedures in this guide, the WHO, WHAT, WHEN and HOW will be summarised as appropriate in each case.
1.4 Mandatory or discretionary
The second part of the formula I learnt that evening was to consider whether an obligation, requirement or procedure was mandatory or discretionary. The distinction is quite clear: if something is mandatory then it must be done in order to create a right for you and/or an obligation on someone else. If something is discretionary, then the party concerned can do it if they feel it is appropriate but lose nothing if they do not.
The key to whether something is mandatory or discretionary is in the little words. If a provision says that a party ‘shall’, ‘must’ or ‘will’ do something then the requirement to do that something is mandatory; that key little word leaves that party with no other option.
On the other hand, if the provision in question says that the party ‘may’ or ‘can’ do something, then that requirement is left to the discretion of that party i.e. the action is discretionary.
Appreciating whether a requirement or a provision is mandatory or discretionary is key to making sure that you, as a party or agent to the contract, do what is required of you at the right time and in the right way.
In the PSC, and indeed every other contract in the NEC3 family together with all the previous editions, there is little to doubt or question as to whether things are mandatory or discretionary. The first clause in the PSC, clause 10.1, clearly states that the Employer and the Consultant shall act as stated in this contract. The meaning is plain and clear: they are all required to carry out the procedures set out in the contract at all times and in the way stated. There is no discretion about it, unless such discretion is given expressly in a particular clause (there are a small number of such instances which will be highlighted as they arise).
1.5 Conditions precedent
Put as simply as possible, a condition precedent is a condition which acts to prevent either a right or an obligation from coming about until such time as the event prescribed as the condition precedent occurs. If a time limit is attached to the occurrence of the event (which is a condition precedent to a right or an obligation) and the event has not occurred within the time limit stated, the right or obligation can never come about.
It is important for users of the PSC to understand this principle; part of a mechanism which is commonly used includes such a condition precedent with a time limit. This actual condition will be highlighted when it is commented on.
While the courts in the UK do not traditionally like or support such clauses, they have enforced numerous examples where the wording has been clear. The first and second editions of the PSC were said to include conditions precedent but it is generally felt that those conditions were not clearly enough worded to be effective. However, with the current edition, it is generally considered that the wording now used is almost certainly clear enough to be considered as an effective condition precedent.
1.6 Note on use of upper case in key words and phrases
Capital initial letters are used to identify terms that are defined as a feature of the PSC as set out in clause 11.1. Whenever I have referred to any such term I have maintained consistency with the PSC and followed that principle of using upper case for the first letter of defined terms throughout the text of this guide. The reader will however come across instances where the same terms are referred to in a general sense, when lower case is used. I have adopted this approach in order to distinguish between specific references to procedures, rights, obligations and other such matters which are directly linked to the PSC and more general comments about good practice, the construction industry and other non-contract-specific items.
For example, ‘Consultant’ refers to a specific issue that concerns the Consultant under the PSC and ‘consultant’ refers to the consultant in general terms.
Chapter 2
Background to the NEC Family of Contracts
2.1 The background: First editions
The timescale that we are looking at with the construction contract starts with a consultative document published in 1991 which was followed by the first edition in 1993, the second edition in 1995 and the third edition in July 2005. The first edition of the PSC was issued in 1994 (reprinted in 1996), the second edition in 1998 and the third edition in July 2005 as part of the consolidated family of contracts.
Many people believe the first edition of the construction contract was published in response to Sir Michael Latham’s (1994) report, Constructing the Team. This report was however pre-dated by both the consultative document and its first edition.
In his report Sir Michael identified the NEC (as the construction contract was then called) as being the contract which, more than any other in general circulation at the time, contained many of the provisions which he considered should be adopted in Construction Contracts. Out of the thirteen key issues which Latham thought should be adopted, the NEC contained eight. The full list of key issues from Constructing the Team is as follows:
By comparison with the other major standard forms available at the time, the NEC’s score of eight was three–four times better than any of its competitors. Encouraged by this praise, the NEC Panel set about revising the construction contract to incorporate the balance of the ideals and to take account of other comments that had been made. This revision was issued in 1995.
The first edition of the PSC was written before Sir Michael’s report was issued and does not contain the thirteen principles above. Like the first edition of the construction contract, it contained more of the above points than its competitors in the market. Users who have only ever used the third edition would recognise the format and content of the clauses but would also notice that the contract has been made more collaborative as the editions have progressed.
2.2 The second edition
The job of revising the first edition followed behind the construction contract and was completed in time for it to be published in 1998.
The revisions incorporated in the second edition brought the PSC into line with the ECC by following the annotation system and bringing in those of the thirteen ideals (see Section 2.1) set out in Constructing the Team considered relevant for a professional services contract. The coordination and use of common annotation across the NEC family has created a mechanism whereby users will find it easier to understand contracts which they have not used previously.
2.3 The third edition
Throughout the life of the second edition, the NEC User’s Group sought and collected feedback from its members on the aspects of the contract where it was felt that revision was required. Taking this feedback into account, the NEC Panel not only revised the NEC PSC but worked to consolidate the other contracts that they had drafted using the same principles and to bring them together into one unified family.
While the revision of the NECECC had at one time been expected in late 2002/early 2003, the work to the whole family delayed the publication until 14 July 2005. (Those readers with a keen eye will have noted that the NEC3 family of documents printed at that time all bear the date June 2005 on the front cover. This had been the intended month of publication; however, production problems delayed the actual launch until July.)
It is not the purpose of this guide to describe the changes from the second to third editions.1 This guide concentrates on administering projects using the third edition of the Professional Services Contract (PSC). That said, the principles of the second edition are very similar; it is my belief that if you are familiar with only the second or the third edition, then you should easily understand the other. Equally, anyone who can properly understand the PSC should, with a little thought and application, be able to use any of the other contracts in the NEC3 family.
2.4 Endorsement of NEC3 by the Office of Government Commerce
When the third edition of the NEC family of contracts was published in 2005, all of the 23 documents in the box set carried an endorsement from the UK’s Office of Government Commerce (OGC) on their title pages and back covers: the use of the family was recommended to all public sector construction procurers. The recommendation was linked to a statement that such procurers must satisfy the objectives of the government’s Achieving Excellence in Construction (AEC) principles. These principles had been launched in March 1999 with the aim of improving the performance of central government departments, executive agencies and non-departmental public bodies as clients in the construction industry. In the UK, depending on the state of the economy, these procurers account for between 35% and 40% of all new build, refurbishment and maintenance work carried out by the construction industry.
It is difficult to find any literature which lists the principles to which the OGC refer. A list of key factors has been published, which can be summarised as:
the establishment of integrated project teams;
the use of short and effective lines of communication;
the consideration of design, construction, operation and maintenance as a whole;
effective risk management;
effective value management;
the use of sound project management techniques; and
creating partnering and long-term relationships.
Many of these matters have their roots in Sir Michael Latham’s 1994 report Constructing the Team and Sir John Egan’s report Rethinking Construction (The Construction Task Force, 1998). It is fair to say that both of these reports (especially the former) influenced the development of the NEC family of contracts. The result was the endorsement by the OGC. The latest contracts in the family published in December 2009 also carry the endorsement; the only difference is that it is now given by the Construction Client’s Board (formerly known as the Public Sector Construction Clients’ Forum). Further information about the AEC principles was available on a UK Government website until October 2011, when the website was closed down. This information is now held by the National Archives and available at http://213.251.150.223/tna/20110822131357/http://www.ogc.gov.uk/guidance_achieving_excellence_in_construction_4675.asp.
2.5 General philosophy: Aims and objectives
The brief leading to the preparation of the initial consultative document of the contract was to prepare a radical new style of contract form. The NEC family as a whole certainly achieved that aim in that it is intentionally different from other forms of construction contract available at that time.
In order to comply with this desire for a family of contracts that would be seen as radical, the drafting committee developed a number of aims and objectives which they sought to introduce into the form. These are summarised in Sections 2.6–2.9.
2.6 Flexibility
One of the principle aims was to make the contracts as flexible as possible, thereby allowing the provisions:
to be used for the appointment of consultants to undertake the role of Project Manager or Supervisor under the NEC3 Engineering and Construction Contract (ECC);
to be used for the appointment of any other consultant undertaking any role in the construction process on behalf of the Employer;
to be used for the appointment of designers by a contractor who has design responsibility under a construction contract;
to provide all the normal current options for types of contract such as competitive tender (where the Consultant is committed to his offered prices), target contract, cost reimbursable contract or a term contract; and
to be used in any country in the world.
As this guide develops, readers will appreciate how this flexibility is provided and how numerous combinations can be used to create contracts with different risk profiles to suit the needs of an individual project or series of projects.
2.7 Clarity and simplicity
One of the more radical aims was to produce a contract that was clear and simple in its format and readily understandable by ordinary construction professionals, as opposed to being a contract that required a degree of legal ability in order to be able to understand the rights and obligations of the parties. This aim for clarity and simplicity has been incorporated in several ways including:
the use of ordinary language rather than legal jargon;
the use of short sentences at all times and by using subclauses to break up large bodies of text;
the use of a logical structure which keeps like matters grouped together;
the provision of flow charts for each procedure in the contract;
a consistent approach to the management and allocation of risk across the different procurement routes; and
by limiting the extent of the text and clauses in order to provide a framework rather than by being prescriptive.
The decision to use clear and simple language with short sentences and subclauses provides the user with a contract that can be read in bite-sized pieces. The downside is that, for an industry that has been used to prescriptive rules in contracts, the lack of detail and direction regarding the next step in every resulting scenario is a concern to many. In order to overcome this concern, users must learn to appreciate the goal of a clause or subclause and adopt their working practices to achieve that goal. Practical examples of such steps are considered in the following chapters of this guide.
This clarity and simplicity is accompanied by the almost exclusive use of the present tense in the drafting of the provisions. Writing a document which sets out the rights and obligations of two parties together with project-management-based procedures that govern how they will operate certain mechanisms is not easy. As a practitioner I think that I know what everything means and I can certainly apply the clauses in a common practical way (as set out in this guide); a judge has however stated that he is not convinced about the use of the present tense. The judge in question is The Hon Mr Justice Edwards-Stewart who stated in his judgement in Anglian Water Services Ltd v Laing O’Rourke Utilities Ltd [2010] EWHC 1529 (TCC):
‘I have to confess that the task of construing the provisions in this form of contract2 is not made any easier by the widespread use of the present tense in its operative provisions. No doubt this approach to drafting has its adherents within the industry but, speaking for myself and from the point of view of a lawyer, it seems to me to represent a triumph of form over substance.’
It is not the purpose of this guide to disagree with the judge’s comments; from a lawyers point of view they are undoubtedly correct. However, the contract that this guide considers is written as it is written and that is what we will concentrate on, as well as a large dose of practical application as applied by practising construction professionals.
2.8 Stimulus to good management
Providing a contract that acted as a stimulus to the use of good project management techniques was central to the philosophy behind the drafting of the original contract and has been improved through the revisions. These procedures are designed to contribute to the forward-looking management philosophy, which is designed to manage problems rather than to simply allow them to degenerate into disputes.
This philosophy can be described by two basic principles, both of which impact upon the objective of stimulating good management:
foresight which is applied collaboratively serves to mitigate problems and in turn reduces risk for all those involved; and
the clear division of function and responsibility helps accountability and motivates people to play their part in the successful management of the project.
In order for this philosophy to be successful, users of the form must adopt a cultural transition which is best described by quoting the opening paragraph of the Procurement and Strategies Guide that forms part of the NEC3 family (NEC panel, 2005b).
‘NEC is a modern-day family of contracts that facilitates the implementation of sound project-management principles and practices as well as defining legal relationships. Key to the successful use of NEC is users adopting the desired cultural transition. The main aspect of this transition is moving away from a reactive and hindsight-based decision-making and management approach to one that is foresight based, encouraging a creative environment with pro-active and collaborative relationships.’
The philosophy and cultural transition are contributed to and achieved by several matters including but not limited to:
the provision of express requirements requiring collaboration between the parties and other personalities involved (see clause 10.1 and Section 4.2);
providing provisions and procedures which encourage and reward foresight (including provisions that penalise a failure to use such foresight);
by clearly allocating risks between the parties, with differing levels of risk depending on the main option chosen but with a consistent approach to risk across those main options;
by a clear and consistent approach to the definition and administration of compensation events;
by providing the Employer with options from which he can choose the solution to suit the particular problem;
by providing procedures to obtain quotations from the Consultant in relation to problem situations or in advance of proposed change; and
by the use of up-to-date, accurate and binding programmes which are regularly monitored and revised, thereby acting as a dynamic management tool.
2.9 Other characteristics
The family provides for different methods of exerting financial control through the selection of the preferred main option. The principle two methods used in the PSC are by an activity schedule (being provided by the tendering consultant before the Contract is formed) or by a time charge. In both cases the primary use of the method is only for assessing payments.
The drafters of the NEC family have avoided the use of any cross-referencing from one clause to another. This serves to remove the need or temptation to divert from the clause the user is reading to other related clauses. Instead, the user is encouraged to simply follow the particular procedure covered by the clause he or she is reading. As a result, the contract seems uncluttered and comes across as very easy to read.
However, this principle has more than one downside. The lack of cross-referencing can lead users who are experienced in other contractual arrangements to become puzzled as to why the contract does not provide provisions that they would expect to see in relation to a matter they are following in a core clause. In all likelihood, such a provision is provided but in another core clause. The lack of cross-referencing in this respect means that users have to understand how the contract is laid out and learn where to look for the conditions they expect to find in a contract of this nature.
The lack of cross-referencing also creates situations where what could be a very severe penalty for the failure to do something is not referred to at the point where the requirement to do that something is actually set out. Instead, the penalty is set out in another core clause. It is therefore not unknown for a user not to do something which he considers is simply procedural and without any consequences should the procedure not be followed; a penalty as severe as termination of the contract could however lurk elsewhere in the document.
1 For those interested in the revisions from the second to third editions, the author wrote a series of articles that were published in Civil Engineering Surveyor in 2005/2006 (Rowlinson 2005a–d, 2006a–c). These articles concerned the ECC but many of the comments apply equally to provisions in the PSC. Some of these were also published by the NEC User’s Group and all are available on Alway Associates website (www.alway-associates.co.uk).
2 The contract in question was actually the second edition of the Engineering and Construction Contract but no doubt the learned judge’s opinion would apply equally to the NEC3 PSC.
Chapter 3
The Options: An Overview
3.1 General arrangement of the PSC
The principle way in which the flexibility referred to in Section 2.6 is provided by the PSC is in the arrangement of the conditions. The drafting body developed a system whereby users of the contract could select from a menu of options to produce a version of the conditions which was suitable for the project that was being considered.
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Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
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Lesen Sie weiter in der vollständigen Ausgabe!
