NEC4 Amendments Published

We take a look at the amendments recently issued by NEC.

Following feedback on the NEC4 suite of contracts, published in June 2017, NEC have recently issued a set of amendments to the suite. These amendments, although released in March, are known as the “January 2019” amendments and make some changes to the Engineering and Construction Contract (ECC) and other forms of contract in the NEC4 suite.

Some of the amendments are simply to correct typos or to change style or formatting. There are a few more substantial amendments as follows:

Clause 63.5 of the ECC, which covers the assessment of delay due to a compensation event, has been amended and also the equivalent provisions in the other contracts. The amendment makes it clear that the assessment will take into account any delay caused by the compensation event already in the Accepted Programme and events which have happened between the date of the Accepted Programme and the dividing date (the date of notification of the compensation event). This provision in the contract now reflects the Practice Note issued for NEC4 to provide guidance on assessing compensation events.

A change to the Termination Table at Clause 90.2 in the ECC and equivalent clauses in the other contracts, provides consistency with the procedures that apply in the event of termination by the Contractor due to the same ‘no fault’ reasons. The changes do not affect the amounts due as stated in the Termination Table.

Clause 50.9 within Options C, D, E and F in the ECC and equivalent in the other contracts, has been amended to clarify that the finalisation is for the Defined Cost for a part of the works.

Within clauses W1.1(1) and W2.1(1) in Options W1 and W2 of the ECC, and equivalent clauses in other contracts, either Party can now replace their Senior Representative after notifying the other Party of the name of the replacement. This provides a formal process to change the Senior Representatives, which otherwise would require the mutual agreement of the Parties.

In the NEC4 Supply Contract and the main forms of subcontract, the form of Trust Deed and Joining Deed for secondary Option Y(UK)1 Project Bank Account has been removed, as the Supplier or Subcontractor will become a member of a Project Bank Account created under a main contract.

In the Professional Services Short Contract only, changes have been made to clarify the difference between work undertaken on a time charge basis as opposed to rates and lump sums.

Essentially, these changes provide clarity and consistency rather than being fundamental, but users should consider including them in upcoming tenders and future contracts. They will, of course, form part of the NEC4 contracts when a new set are published.

For details of the NEC4 contracts issued in June 2017, please refer to our NEC4 Supplement and for further information on NEC contracts, visit our Spotlight on NEC feature.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.