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New NEC4 Facilities Management Contract coming soon

02 December 2019

The suite of contracts has a more collaborative focus.

New NEC4 Facilities Management Contract coming soon

NEC has announced that the new suite of Facilities Management Contracts will be available in the new year.

The new main contract, the NEC4 Facilities Management Contract (FMC), will be joined by the NEC4 Facilities Management Short Contract (FMSC), the NEC4 Facilities Management Subcontract (FMS) and the NEC4 Facilities Management Short Subcontract (FMSS), along with the associated user guides and flow charts.

Developed alongside the Institute of Workplace and Facilities Management (IWFM), the new contracts embody the good practice in contract procurement from the NEC Contracts, and are designed specifically for the FM industry.

Three NEC4 principles

All NEC4 contracts, including the new FM contracts, are designed around the following three principles:

  • They stimulate good management of the relationship between the two parties to the contract and, therefore, of the work involved.
  • They can be used in a wide variety of commercial situations, for a wide variety of types of work and in any location around the world.
  • They are clear, simple and written in plain English, using language and a structure which is straightforward and easily understood.

The new NEC4 Facilities Management Contract, like every NEC4 contract, requires parties to act ‘in a spirit of mutual trust and co-operation’. This differentiates the NEC4 suite from traditional contracts, which follow an adversarial approach.

Key features in the new FMC include:

  • Pricing Options – there are three main pricing options; Option A (priced contract with Price List), Option C (target contract with Price List) and Option E (cost reimbursable contract).
  • Early warnings – to many users, the ‘early warning’ process is the “jewel in the crown” of NEC4 contracts. This emphasis on cooperation to mitigate risk is important in ensuring project success.
  • Service Failures – the contracts contain detailed provision to deal with service failures recognising the variety of reasons, consequences and corrective measures required to handle these.
  • Performance Table – the Performance Table is a key part of the contracts and is used to financially incentivise the Service Provider to achieve or better the service levels set by the client.
  • Secondary Options – there are a range of secondary options which allow clients to tailor the contract to suits suit their own needs. These include options for multiparty collaboration, information modelling (BIM) and extending the service period. The new suite of contracts provides clear, robust and flexible methods for driving achievement of the agreed service levels and therefore project success.
  • Tony Ding, NEC Contracts Specialist.