NEC outlines contractual guidance

16/04/2020 | DOMINIC BROWNE

The construction industry’s leading procurement contract suite, NEC, has issued guidance for navigating its contracts during the coronavirus.

The guidance relates to the most commonly used Engineering and Construction Contract (ECC), although similar actions apply to all other NEC contracts.

”Local
 

'While advice is given in relation to the standard wording in NEC4 contracts, if modifications have been made, the contract should be reviewed to check whether this guidance still applies,' NEC said in a statement.

Following high volumes of enquiries from clients and contractors over the contractual complexities of sites shutting or being delayed due to the effects of COVID-19, Peter Higgins, NEC4 contract board chair, has outlined some key points of guidance.

The advice helps contractors make sense 'of their obligations and legal standing, particularly in relation to Clause 19, which many contractors will be looking to utilise' - the procurement body said.

'While the impact of the virus will vary between different countries, and affect contracts in different ways, the main problem is likely to be the unavailability of resources - primarily people but also plant, materials and equipment,' Mr Higgins said.

'An early warning of this should have been given by either the contractor or the project manager so that discussion about the potential impacts could be held in advance, and mitigation measures identified. And as the impact of the virus develops, and restrictions are implemented which effect works, further early warning meetings should be held.'

Mr Higgns highlighted that governments in some countries had imposed specific restrictions on movement of people and goods.

If the worksite in the contract is located in such a country and if Option X2 – changes in the law – has been incorporated into the contract, 'those restrictions would be a compensation event and the impact would be assessed in accordance with the contract'.

Where work has had to be stopped or suffers delay, because of the virus, Clause 19 – prevention – may well apply.

'If the impact stops the whole of the works being completed by the date for planned completion shown on the accepted programme, or being completed at all, then the provisions of this clause apply and the project manager should take control of dealing with the matter,' Mr Higgins said.

'An event which passes this test will also be a compensation event under Clause 60.1(19), with instructions issued by the project manager to deal with the matter also likely to be compensation events, through a change to the scope, stopping or not starting work or other events identified in Clause 60.1.'

However, under Clause 19 the delay must impact the completion date of the whole project not just part of it, and the clause only applies in the case of delay, not an increase in cost.

Mr Higgins added: 'Under the NEC4 Term Service Contract, which does not contain Clause 19 or the corresponding compensation event, the same approach for early warning and proactive management by the service manager should be followed.

'All parties should work together in accordance with clause 10.2 to best address any impact on the delivery of the service due to the coronavirus. While the short contracts do not include Clause 19, they do include the early warning procedure and (with the exception of the NEC4 Term Service Short Contract) provide for the event being a compensation event. This emphasises the point that the Client should be actively managing the effects of the virus to ensure that actions taken are in the best interest of the project.'

For more information visit the NEC website or view NEC’s Q&A session on handling COVID-19 disruption here.

If you should have any questions regarding specific NEC contracts, please contact the NEC helpdesk.

Used on major construction and engineering projects across the UK and abroad including Thames Tideway 

Highways InProfile

latest magazine issue
Highways jobs

Director of Transport

£112,924
East Midlands Combined County Authority (EMCCA) is on a bold journey. East Midlands Region
Recruiter: East Midlands Combined County Authority

Ferry Host - WMF3049i

£25,584 - £25,992
Ferry Host - WMF3049i Windermere, Cumbria
Recruiter: Westmorland and Furness Council

Director of Streetscene

£94,972 - £108,767
We continue to have big ambitions for our borough Fareham, Hampshire
Recruiter: Fareham Borough Council

Principal Engineer - Urban Traffic Control (UTC)

£44,711 - £49,764
Liverpool is home to vibrant, energetic and engaged communities. Liverpool, Merseyside
Recruiter: Liverpool City Council

Roadworker/Driver

Grade 6 £25,183 - £25,638 per annum (Pay Award Pending)
We’re looking for Roadworker/trainee LGV drivers to be part of our team Derbyshire
Recruiter: Derbyshire County Council

Project Chargehand (2 Posts)

Grade 9 £31,344 - £33,253 per annum (Pay Award Pending)
We’re looking for experienced Project Chargehands to be part of the Highways Construction Services team Derbyshire
Recruiter: Derbyshire County Council

Lawyer 2- Planning and Highways

£49,764 - £54,181
We are looking for a fresh thinking and enthusiastic Planning and Highways Lawyer Hereford, Herefordshire
Recruiter: Herefordshire Council

Development Engineer

£35,967 - £41,268 per annum
Are you ready to play a key role in shaping and safeguarding the future of our highways and public spaces? Bexley (City/Town), London (Greater)
Recruiter: London Borough of Bexley

Professional Services Partnering Manager

Grade 13 £47,653 - £51,296 per annum (pay award pending)
We are seeking a dynamic and experienced Professional Services Partnering Manager to lead the strategic management Darley Dale, Matlock
Recruiter: Derbyshire County Council

Technical Supervision Manager

Grade 13 £47,653 - £51,296 per annum (pay award pending)
We are looking for an experienced and driven Technical Supervision Manager to lead our technical supervision teams within the Highways Service. Derbyshire
Recruiter: Derbyshire County Council

Street Lighting Electrician (CDC)

Grade 8, £32,662 - £36,239 (pay award pending)
Highways Operations is a growing service area within the Place directorate. Doncaster, South Yorkshire
Recruiter: City Of Doncaster Council

Highways Assistant Engineer WMF2133e

£39,513 to £40,476
We have an exciting opportunity for the right person to work within the challenging and ever-changing landscape. Penrith, Cumbria
Recruiter: Westmorland and Furness Council

Highways Inspector/NRSWA

£36,345 - £40,344
We are looking for an organised and self-motivated individual to join our Streetworks Team based in Hackney Central. Hackney, London (Greater)
Recruiter: London Borough of Hackney Council

Structures Commissioner

Grade 14 £53,166 - £59,080 per annum (Pay Award Pending)
We are seeking an experienced and strategic leader to join our team as the Structures Commissioner. Derbyshire
Recruiter: Derbyshire County Council

Team Leader Network Co-ordination

£51,429 - £58,140
As Team Leader for Network Coordination, you’ll manage a team that oversees all works and events on our public highways. Kensington and Chelsea, London (Greater)
Recruiter: The Royal Borough of Kensington & Chelsea Council

PRINCIPAL TRANSPORT PLANNING OFFICER

£43693 - £46731
We have an exciting opportunity for an experienced professional to join our team in Hull as a Principal Transport Planning Officer. Kingston upon Hull, East Riding of Yorkshire
Recruiter: Hull City Council

HIGHWAYS AND TRAFFIC ENGINEER - 4 POSTS

£43693 - £46731
We have several exciting opportunities for suitably qualified Highways Civil Engineers and Traffic Engineers Wilson Centre, 1st floor, Hull HU1 2AG
Recruiter: Hull City Council

Principal Transport Planner

£45,718 to £49,764
Do you have considerable experience in the transport strategy and policy, and are you looking for your next career development opportunity? Sheffield, South Yorkshire
Recruiter: Sheffield City Council

Project Lead - Bridges and Structures WMF3037e

£45,718 to £46,731
We are currently seeking to recruit a Project Lead to join our Bridges and Structures team Kendal, Cumbria
Recruiter: Westmorland and Furness Council
SUBSCRIBE NOW

Latest Video

Subscribe to Highways today to ensure you keep your finger on the pulse of everything happening in the UK road network throughout the year.

SUBSCRIBE NOW