The concepts supporting more collaborative and sustainable projects originated in the UK.
ICE, international law firm Minter Ellison in Perth and Michael Ward, British Consul General and UK Department for International Trade in Sydney, recently hosted two boardroom discussions led by ICE Director General Nick Baveystock, Steven Evens, Australia NEC Representative and Peter Higgins, NEC4 Board Chairman from the UK.
Project 13 is an industry-wide and industry-led movement to change infrastructure delivery models providing better outcomes for the public and customers while moving to a more sustainable and collaborative business method.
The NEC is a suite of collaborative contracts used extensively in infrastructure projects in the UK, Hong Kong, New Zealand and many other countries.
Nick Baveystock said: “The launch of Project 13 is the chance for industry and government to change how we deliver our infrastructure.
“Developed between industry, clients and government over a number of years, Project 13 places customers at the heart of our national infrastructure programme, focusing on the social and economic value infrastructure can provide over the long term.”
Why Project 13 is important
Project 13 sets out a delivery model based on effective collaboration between client organisations, contractors and other delivery partners.
It’s backed by several significant promoters in the UK, including Anglian Water; the Environment Agency; Heathrow Airport and National Grid.
The Project 13 website provides organisations with the tools and training to adopt this new business model. These include the Commercial Handbook and Project 13 Blueprint, which provide detailed guidance to help businesses shift their thinking and commercial strategies.
NEC and collaborative contracting
Steven Evans and Peter Higgins discussed the benefits of collaborative contracting and how adopting the NEC suite of contracts can help the New South Wales (NSW) government achieve the aims of the Construction Leadership Group (CLG).
The Premier of New South Wales established the government Construction Leadership Group (CLG), led by Infrastructure NSW, to drive reform in development, procurement and delivery of government-led infrastructure and building projects.
As part of that reform, the CLG prepared and issued, in June 2018, the NSW Government Action Plan; a 10 Point Commitment to support the construction sector.
Point 1 of that plan is a commitment to more collaborative contracting arrangements.
Plain English contracts
While traditional contracts are complicated and penned in legalese, the NEC suite is written in plain English and founded on the three key principles of clarity, flexibility and stimulating good management.
NEC promotes proactive collaboration, transparency, early warning and appropriate allocation of risk, and offers a range of pricing models including incentives for early completion and sharing of cost savings.
Evans said: “With the NSW Government recognising that collaborative arrangements in construction result in better project outcomes, I hope to build on the initial interest in the NEC to encourage more widespread adoption of the contract for the benefit of all stakeholders.”
Peter Clayton, Partner at Pinsent Masons (HK) shared his experience of the introduction of NEC to Hong Kong.
After a period of trials, the Hong Kong government now joins the UK government in mandating the use of NEC for all its construction spending.
He said: "The adoption of NEC in Hong Kong has led to a step change in levels of collaboration and engagement in the industry. It has better aligned stakeholders to common goals and introduced a welcome diversity of options for strategic procurement and future initiatives."