NEC3 - Managing change - 16380

The Office of Government Commerce (OGC) has endorsed the use of NEC for all public sector contracts. The reason being is that it stimulates effective project management and enables the parties to manage risk and change more efficiently, which in turn serves to mitigate the cost and time effects of any risk event should it arise under the contract. In essence it facilitates a more collaborative working culture between the parties. The NEC3 contract is gaining in popularity and has been adopted for use in the decommissioning of nuclear power stations and the London Olympics, it also recently received support in the Tenth Special Report on Construction Matters by the House of Commons. It has strict time limits for the notification of compensation events as set out in the core clause 61.3 whereby the Contractor's contract administration team needs to notify the project manager within an eight week period of becoming aware of the event. The contract also provides for an early warning procedure whereby the Contractor and the project manager will cooperate and pro-actively discuss how issues can be overcome in a collaborative manner. This NEC3 contract requires both the Contractor and the Employer to act positively and is welcomed as a possible solution to the entrenched disputes which have regularly occurred on major energy projects and if properly administered will hopefully result in an earlier and less fraught final account settlement process for both parties. (authors)