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The New Engineering Contract (NEC) was developed in the UK during the 1980s and 1990s as a fresh approach to the structuring of contractual relationships. NEC initially focused on engineering construction contracts but has now broadened in its third edition (NEC3) to cover a wider range of 16 different contracts including those for term services, professional services and the supply of materials. A new NEC4 suit is being developed.
NEC3 now offers probably the widest range of options available for setting up these contractual relationships in an integrated manner, potentially achieving efficiencies in project definition, design and procurement. Many of its users claim that it stimulates good management practices throughout their projects.
For use internationally, in New Zealand NEC had been slow to gain acceptance. In recent years, some public utilities and local authorities have trialled the documentation and a New Zealand body of experience on both the client and the contractor side is starting to develop. However, there remain some potentially troublesome areas, such as in mismatches with local legislation, unfamiliarity by many tenderers and greater management inputs that users need to be aware of.
In this workshop, you are made aware of the strengths and potential weaknesses of the use of NEC3 in a New Zealand context. The various primary and secondary options available for construction contracts are reviewed and guidance is given on their selection. Differences in terminology and business processes associated with the procurement and administration of NEC3 contracts are explained.
By the end of this workshop, you will be able to: