Case Studies 2021

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NEC4 ECC explained - from positive incentives to preventative measures

In construction there’s two opinions when it comes to good performance and project delivery – the client’s and the contractor’s. Both parties have their expectations and their requirements from the outset, so delivering a finished product that suits the timelines, design ideals and quality of the client whilst achieving the margins desired by the contractor is a balancing act. To help provide some stability and regulation to proceedings, the NEC Engineering and Construction Contract (ECC) can act as the perfect mediator. The ECC is specifically written to contain a variety of provisions that attempt to ensure excellent performance by the contractor. In the cases where this isn’t achieved, the client has the option to pursue a form of recourse in the form of a pre-agreed action or financial penalty. As a contractor, you are obliged to maintain levels of quality workmanship and hit milestones within pre-agreed timeframes. Should these not be achieved there are preventative measures and negative incentives. On the contrary, if targets and timelines are achieved, there are positive incentives to reward excellent performance. Preventative measures in action Fundamental to all NEC contracts is the obligation for both parties to act in ‘a spirit of mutual trust and cooperation’. This collaborative approach is designed to pre-empt problems and find appropriate solutions in advance. Specifically, clause 15 requests that the project manager and contractor are to proactively identify risk and notify all parties, especially when time, cost or quality is likely to be compromised. Such warnings should come via early warning meetings and communication tools, where solutions are recorded by the project manager in an appropriate register. Time and quality incentives In situations where timelines and completion dates are set in stone, clause 36 allows both parties to propose acceleration towards job completion. This is done in mutual trust and agreement – the project manager cannot enforce the acceleration and is required to accept the quotation from the contractor for the acceleration to be granted. Quality control is maintained via clause 40 insisting that the contractor operates a stringent quality management system, quality policy statement and quality policy plan. Should the terms of the quality plan be breached, the project manager can request corrections without any financial contribution. Rewards for outstanding performance Should the contractor achieve pre-agreed time and cost savings, there are various measures by which they can be rewarded in the ECC. One such incentive is where the contractor is paid a share of the cost savings of the job. Additional incentives include early finish bonuses (assuming all quality control tests are satisfied). The ECC is designed to ensure a desire to complete projects to a high standard, on time and within budget is mutually shared between client and contractor, thanks to sufficient incentives. NEC4 ECC practicalities and problem solving The practical application of the ECC ensures all bases are covered – there’s a clear and open relationship between the client and contractor. There are pre-agreed quality measures in place and a mutual benefit to completing a job on time. When the contract is adhered to and all parties hold up their part of the bargain, the ECC will help to deliver excellence in construction. To help with your contract management, visit the MPS website to see how our unique CCM Contract Management System can revolutionise the way you do business or call 01223 597933 or email sales@mpsprocess.com You can Share Our Blog On Social Media Apps;

A closer look at the NEC Contract Horizon platform

New agreements, new technologies and new projects come with their own levels of anxiety and confusion, but one way to streamline the drawing up, editing and entering contract information is to use the new online NEC Contract Horizon. By engaging the online tool, users can have complete control and visibility over the contract at all times. The latest version of a contract is online and easily accessible, helping to prevent the long paper trail that is s ynonymous with contracts on construction jobs of all sizes. The contract can easily be shared with collaborators and allow their voice to be heard thanks to their comments on certain sections and clauses being visible. It’s also extremely safe because it is stored online – no hard copies to go missing or be damaged. Let’s take a look at the additional features of the NEC Contract Horizon platform… Save time in future The NEC Contract Horizon platform allows you to save previous contracts, so rather than draw up a whole new agreement with every new project, you can save existing templates and adapt them to make them suitable for subsequent jobs. This 21st century efficiency saves time, money and confusion. The contracts are entirely customisable, and it’s easily done, thanks to a library of z-clauses within the software. Sharing and approval The online nature of contracts means that they can be shared with management teams, legal teams, the board o f directors and associated bodies. This means the approval process is much faster and easier than the traditional printing of lots of copies of long contracts. This outdated and paper-heavy process can create further work when handwritten comments across multiple copies have to be scrutinised, ratified and added to a new amended document. Instead, the online contract can be instantly distributed to all parties and their comments and feedback viewed i mmediately online. There’s also an ability to control who can comment and amend a contract, to prevent too many voices being added to the contract. Streamlining and efficiency When contracts are particularly large and complex, the platform allows multiple contributors to work on it at once. This teamwork saves valuable time and money, especially when you consider everyone is working on a single document. This allows it to be updated in real time – not at a later date when multiple amendments have to be collated in the ‘latest’ version of the contract. The evolving nature of the NEC suite means that the platform will be updated alongside the new contracts that are released, so it’s a technology that will always stay relevant and won’t lose its functionality with the passing of time. If anything, it’ll likely get easier to use and become more efficient as more features are added over time. Final thoughts on the NEC contract horizon platform As the wider construction world is pulled into the 21st century by embracing technological developments, the legal element of the industry should follow suit. When employed correctly the NEC contract horizon platform will save organisations time and money, allowing us to deliver high quality work without any unnecessary delay. MPS provides contract management solutions that allow contractors and clients to work together on projects effectively. To help with your contract management, visit the MPS website to see how our unique CCM Contract Management System can revolutionise the way you do business or call 01223 597933 or email sales@mpsprocess.com You can Share Our Blog On Social Media Apps;