Aug 14 2015

Four things to consider when managing a NEC3 project

Construction contract managementThe NEC3 suite of contracts codifies a culture of collaboration between project teams. It instructs project teams to report and resolve project change as and when it happens via a predefined, structured series of communication processes. This collaborative approach helps to improve efficiency and provides greater clarity on project status for all parties.


Automate Early Warnings and Compensation Events

The NEC suite of contracts have a number of bespoke processes and workflows, particularly around change – such as Early Warnings and Compensation Events. These change events generate a range of documents and instructions which need to be issued in accordance with the specific requirements of the contract. Using email and excel to manage these communications carries the risk of information not reaching the right parties, in the right format, and within the agreed timescales. Without a structured audit trail or unbiased tracking system the potential for dispute and non-compliance with the contract is apparent.


On larger NEC3 projects the level of contract administration increases exponentially and requires considerable levels of project management resource to manually administer.  The high volume of paperwork affects all parties and if one company is overwhelmed or under staffed, then the knock-on effect will be late responses, mistakes, potential delays and disputes.

Automation of processes, pre-configured to the requirements of the contract can significantly reduce contract administration and reduce the risk of clerical errors, whilst freeing up resource for all parties.


Ensure adoption of contract across all team members

Even if adequate human resources are in place to deal with the high levels of contract administration, unfamiliarity with the NEC3 amongst project members (e.g. material suppliers or small subcontractors) can result in non-compliance.  The contract can include many specific clauses and options which can seem confusing to the uninitiated. In addition, communication via email is open to human error with information being omitted or recipients missed off.

Providing web based pre-configured forms for all contract related communications can significantly reduce barriers to use, thereby increasing supply chain compliance. In addition, using a system with licensed content from NEC3 authors Thomas Telford ensures all users have the instructions and glossary resources available to utilise the NEC properly.


Real-time reports for fast decision-making

Using email and spreadsheet to manage Early Warnings and Compensation events can lead to uncertainty on the impact of change in terms of time and money. Without clearly understanding the potential consequences, it is not unusual for project commercial teams to have a risk fund in place to cover the costs of an unforeseen change.

Managing NEC contracts through a web-based solution with reporting functionality ensures that all contract related documents and communications are held in on place giving visibility of Early Warnings and the ability to forecast and budget on their potential consequences to the project/programme. This enables project teams to deal with issues more dynamically rather than having to maintain large contingencies.


Supporting the right behaviours

NEC contracts require both project teams and the supply chain to undertake a cultural shift towards a collaborative way of working. For supply chain members who are used to traditional adversarial contracts this can be difficult. Particularly in terms of mutual trust between different parties and owning up to mistakes in order to rectify them collectively.

Creating cultural change is not easy, requiring management buy in and clear articulation of the benefits through the supply chain. This can be supported by having robust and easy-to-use processes, supported by systems that make it easy for the supply chain to collaborate by clearly outlining responsibilities and required actions for all users.


NEC Licensed content partnerCONJECT is a Licenced NEC3 Content Partner  

CONJECT is a licenced content partner of the NEC providing a bespoke cloud solution for managing all NEC contract documents and processes. The solution is configurable to all contract versions, and comprehensive reporting provides project teams with real-time information about the implications of change. For more information read the NEC Contract Management datasheet.


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Parsons Brinckerhoff save £100,000 on contract administration alone

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About the author

Michelle Mason

Michelle Mason leads the UK and MEAP Marketing team, with far too many years in B2B marketing to mention. A CONJECT newbie, Michelle is eagerly climbing a steep learning curve.

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