NEC Contracts: application to road development and management scheme:s

This resource acts as an aide to experienced engineers to demonstrate how NEC contracts can be applied to highway management, and how it has been successfully employed for the Highway Maintenance Efficiency Program (HMEP)

M1 Junction 10-13 road improvements
M1 Junction 10-13 road improvements

What are NEC3 contracts?

NEC3 is a family of contracts that facilitates the implementation of sound project management principles and practices as well as defining legal relationships.

It is suitable for procuring a diverse range of works, services and supply, spanning major framework projects through to minor works and purchasing of supplies and goods. The implementation of NEC3 contracts has resulted in major benefits for projects both nationally and internationally in terms of time, cost savings and improved quality.

This information explains how NEC contracts can be applied to highway management, and how it has been successfully employed for the Highway Maintenance Efficiency Program (HMEP)

How does NEC work?

NEC produces a diverse range of definitive end-to-end project management contracts that empower users to deliver projects:

  • on time
  • on budget
  • to the highest standards.

The suite is uniquely flexible and can be used for the procurement of works, services and goods across all sectors – including public and private, buildings and infrastructure, plant and equipment – as well as all stages of a project lifecycle, from planning, design and project management to construction, maintenance and facilities management.

Each contract is supported by associated guidance notes and flow charts, detailing exactly what procedures should be followed by whom and when.

The NEC Structure

The principal NEC3 contracts, short contracts and sub-contracts can be broadly grouped into works, services and supply as shown below. The choice of NEC3 form depends on the project complexity and level of risk.

  • Works encompasses purchases such as the construction, refurbishment and decommissioning of buildings, structures, process plants and infrastructure – including everything from houses, schools, hospitals and leisure facilities to infrastructure for water, energy, transport, industry and waste.
  • Services includes purchases of professional services such as engineering, architectural, project management and consultancy works. It also covers composite services such as facilities management, cleaning, catering, security, maintenance and data processing.
  • Supply includes supply of high-value goods and associated services such as transformers, generators, rolling stock, cranes, gantries and complex plant. It also includes lower-risk items such as building materials and products, stationery, personal protective equipment and parts.Consultation documents should be clear about the consultation process, what is being proposed, the scope to influence and the expected cost and benefits of the proposals.

For further information, visit the NEC website.

NEC Contracts for Highway Management

NEC3 is widely recognised as having major benefits for projects both nationally and internationally in terms of time, cost savings and improved quality. For example:

Highways England Managed Motorway Framework

Highways England awarded a national framework contract for up to £2 billion of managed motorways schemes in February 2010.

Balfour Beatty, a BAM Nuttall/Morgan Est joint venture, Carillion and a Costain/Serco joint venture were appointed to deliver the managed motorway schemes, which involve introducing variable speed limits and hard-shoulder running on sections of the busiest section of motorways to improve traffic flow during busy periods. Each scheme is being delivered as a package order using an NEC3 Engineering and Construction Contract.

Highways Maintenance Efficiency Programme (HMEP)

In a bid to ensure the critical success of the Government’s £6bn pledge to improve local roads between 2015 and 2021, the NEC suite of contracts has been positioned at the heart of a major overhaul of Local Authority (LA) highway service procurement.

Amongst growing pressure to tighten purse strings and requirements to make up any road network maintenance shortfall through other funding, a newly established £578m fund – earmarked for rewarding LAs that can demonstrate efficiencies – represents a critical opportunity for councils.

The NEC3 Term Service Contract (with amendments) has been selected as the works contract at the centre of the new £6m Highways Maintenance Efficiency Programme (HMEP) – a sector-led procurement suite and best practice framework established to revamp, simplify and standardise the way English Local Highway Authorities procure highway services.

The HMEP matches these essential savings and efficiencies with an ever-growing need for highways maintenance. It has been designed by the highways sector, for the highways sector, to enable change and provide the tools and resources to help leaders and managers transform delivery of roads and services.

Further details about the HMEP can be found on http://www.highwaysefficiency.org.uk/

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