New Engineering Contract (NEC)

Year:1993

Duration:25 years and counting

Cost:Unknown

Country: Global

What did this project achieve?

The aim of NEC has always been to stimulate good project management

The New Engineering Contract (NEC) is a series of contracts designed to manage any project from start to finish.

The contracts are written in plain English with a straightforward structure and are designed to be easily understood.

NEC contracts aim to prevent costly disputes. First developed in 1993, they were designed to replace typical construction contracts which until then had been largely ‘adversarial’ in approach.

An adversarial contract is one where people who’ve signed up to it are likely to act in their own interests if something goes wrong. Adversarial contracts can mean companies going out of business when they’re hit with severe contract penalties – for example when a project falls behind schedule.

NEC contracts are endorsed by both governments and industry bodies. They have a strong track-record for helping to deliver large-scale projects successfully.

Difference the contracts have made

NEC contracts look after the client’s interests while still protecting the contractor’s profit.

NEC helps clients achieve more certainty about the outcome of a project and makes sure contractors are paid fairly and promptly.

NEC contracts have been used for many high profile infrastructure schemes. Such as Crossrail, Christchurch International Airport, London 2012 Olympic and Paralympic games, Heathrow’s Terminals 2 & 5C and the Halley V1 British Antarctic Survey research station.

How the contracts evolved

The first NEC contract then known as the New Engineering Contract was published in 1993 after 7 years research and development.

The contract was viewed as a departure from existing legal documents as it was written in plain English and designed to encourage good project management.

The second edition, the NEC Engineering and Construction Contract, appeared in 1995. Accompanying publications included a professional services contract and an adjudicator’s contract designed to help settle disputes.

The NEC contracts saw 10 years use around the world until the publication of the NEC3 contract range in 2005. The NEC3 contracts have successfully delivered £100bns-worth of works, services and supply around the world.

In 2017 NEC4 was launched with updated contracts and improvements in flexibility, clarity and ease of use.

No other set of contracts has had such a transformative effect on the built environment industry as NEC.

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I think NEC is the unsung hero of the Olympic Games, a bit like the spine or the heartbeat in the human body. I believe it helped deliver the project.

Ken Owen

commercial director of CLM which project-managed construction of Olympic venues for the London 2012 games.

Fascinating facts

Like other engineers at the time, Victorian super-engineer Isambard Kingdom Brunel was well-known for drawing up contracts along adversarial lines.

Brunel’s terms and conditions made life so difficult for sub-contractors that towards the end of his career it was very difficult to get anyone to tender for a scheme where he was the engineer.

Brunel died in 1859. It was another 15 years before all the outstanding claims and cases connected to the engineer’s projects were settled in court.

People who made it happen

  • The New Engineering Contract was originally drafted by Martin Barnes.

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