Design of an NEC4 ECC contract by selecting Z clauses along with contract features

This study explores the design of an NEC4 ECC contract by selecting Z clauses along with contract features. It also compares the payment and dispute resolution methods between NEC4 ECC contracts and FIDIC contracts. The NEC4 ECC contract is designed to enable project collaboration and innovation in the construction industry. It offers various options for pricing and payment, as well as shared financial risks between the contractor and the client. The study highlights the importance and benefits of using the NEC4 ECC contract for managing construction projects.

Chipco Supermarket

Table of Contents
INTRODUCTION...........................................................................................................................1
Design of an NEC4 ECC contract by selecting Z clauses along with contract features..............1
Comparison that how payments are managed between NEC4 ECC contracts and FIDIC
contracts.......................................................................................................................................3
Comparison of dispute resolution methods between NEC4 ECC contracts and FIDIC 2017.....5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
A contract can be defined as an agreement that give rise to obligations which are
recognized by law. Three essential and requirements in creation of a contract such as agreement,
consideration and intention (Gerrard and Kings, 2018). This study is going to show some basic
principles of contract which need to be followed by any type of organization and industry. It
shows all elements, types, validity and other basic things of a contract. This study will also show
the importance and features of NEC4 Engineers construction contract which allows and help
people to solve problems and conflicts and manage activities in an efficient manner. There is a
difference between NEC4 ECC contracts and FIDIC contracts in the context of ways of
managing disputing resolution as well as payment methods.
Design of an NEC4 ECC contract by selecting Z clauses along with contract features
NEC4 engineering construction contract is a contract which is being developed to allow
and help organizations to inspire and enable project collaboration across the United Kingdom
and internationally. Cheapco supermarket wants to convert around 25 Food-co stores to Cheapco
stores and expand its stores and business across the UK within 5 years. It also wants to renovate
its existing stores and also develop new stores. For accomplishing these goals and objectives
there is a requirement for the manager of this supermarket is to follow NEC4 contract because it
is mainly designed and developed to help businessman to innovate their businesses via digital
advances. It also delivers real project value to people and also make able to best practices in
procurement. The main aim of this contract is to make able disciplines across a flexible industry
to manage as well as deliver truly collaborative projects (Lupton, 2019). There are several
options in NEC4 in which option A which is known as a priced contract with an activity
schedule. According to this option, each of the activity is allocated a price as well as interim
payment that is made against the completion of each activity. Option B is known as price
contract with bill of quantities. It is known as suit of construction contract whose intention and
aim is to enhance collaboration between the client and the contractor. NEC4 ECC option C is a
target cost contract with activity schedule in which financial related risks are being shared
between the contractor and the client in agreed terms. NEC4 option D is a target contract with
bill of quantities. It is also a suit of contracts whose main aim is to promote partnering between
parties. NEC4 option E is known as a cost reimbursable contract whos intention is same as like
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option D suite of construction contract. Option F in NEC4 suite of contract is the cost
reimbursable in which financial risks is taken majorly by the client. This document contain all
important core clauses as well as secondary option clauses in which contract data, cost
components are relevant to an option F.
There are several features of this contract such as: it is an effective contract that can be
used in wide variety of commercial situations with the main aim of managing wide variety and
types of works. It is very clear and simple contract to be used because language and structure
which it involves is easy to understand. There are several clauses in contracts and the selection of
the clause is a difficult task. Each of the clause have and follow a particular type of pricing and
payment. In the context of NEC4 Z clause it can be said that it is being used to amend the terms
of this contract. For more understanding NEC4 ECC contract, some objectives can be shown
which can help out the reason of developing this contract. Some objectives include: providing
the best and greater stimulus to good management, supporting new approaches to procurement
which can help in improving contract management. Inspire people for increasing use of NEC in
new markets and sector. For more supporting these objectives and this contract, NEC4 users said
that it was to be evolution not revolution. In the context of main option clause, it can be said tha,
contractor provides all those informations which shows that how each activity displayed on
activity schedule relates to the operations on each of its programme which contractor submits for
acceptance. In second part or activity schedule in main clause, informations in activity schedule
is not works informations. It also shows that if a contractor changes method of working which
has been decided at his/her dissertation in this care activities on the activity schedule do not
relate to the operations.
There are some guidelines by which this contract can be designed and draft such as:
requirement of quality management system, a project manager to give a reason with sufficient
details in order to make able to contractor to correct the matter at the time of replying to
communication. Reducing differences between NEC and ECC forms for making flatten to
learning curve for new users. Some features of Engineer construction contract (ECC) involved: it
has easy and basic structure whose content does not change. Changes in terminologies, provision
for the final assessment to become conclusive. Some changes in terminology like employees
become clients, informations related to work become scope. The other objective of developing
and making NEC4 contract is the success of NEC3. Direct feedbacks has been taken from
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several industries with the main aim of improving the contractual framework and retaining the
core NEC3 principles (Hughes and Waterhouse, 2018). In addition, the NEC confirmed that they
sought to plug the gaps in the suite identified by employers to avoid the need for Z clauses to be
regularly incorporated. There are approximate 25 secondary options clauses in engineering
construction contract in which 21 are labelled X options. Three are labelled Y options and
remaining 1 is a Z option. There is a choice for client to use either main option A or B for
contract and secondary option clauses.
NEC4 makes able to an individual and project holder to deliver project on the time in a limited
and standard budget with the highest quality and standard. It is suggested for making this
contract more successful and taking advantage that it should be used for the appointment of the
contractor for construction work and engineering. In addition, it is also stated that this contract
provides flexibility, clarity and proper guidelines for easy use with the main purpose of
delivering real value in the procurement of works. Some other features are described as follows:
Assignment: A new core clause of Z clause in this contract has been developed to permit
one party to assign their rights under the contract to another party.
Confidentiality: Additionally clauses have been developed and incorporated to restrict
the disclosure of personal and sensitive informations relating to the project.
Design and build option: There is a new secondary option has been added for
contracting. This new option deals with many situations and requirements such as: professional
indemnity insurance requirements, copyright licences and retention of documents.
Contractors' proposal: By launching and developing this NEC4 ECC contractor now
has an option to propose an acceleration with the main benefit and purpose to achieve the
completion even before the completion date. They also have an option to make an effective
proposal for changing the scope to reduce the cost of an asset (D'Onofrio, Frame and McEwen,
2018).
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REFERENCES
Books and Journals
Chern, C., 2019. The law of construction disputes. Informa Law from Routledge.
Choi, S.H. and Kim, Y.S., 2016. Priority analysis of dispute factors in overseas construction
based on FIDIC contract conditions. KSCE Journal of Civil Engineering. 20(6).
pp.2124-2133.
D'Onofrio, R., Frame, S. and McEwen, L., 2018. CONSTRUCTION LAW INTERNATIONAL
Volume 13 Issue 3 November 2018. CONSTRUCTION LAW INTERNATIONAL. 13(3).
Gerrard, R.A. and Kings, S., 2018. NEC4 Practical Solutions.
Gerrard, R.A. and Waterhouse, P., 2019. NEC4 Resolving and Avoiding Disputes.
Hughes, K. and Waterhouse, P., 2018. Understanding NEC4: Term Service Contract. Routledge.
Lau, C.H. and et.al., 2019. The challenges of adopting new engineering contract: a Hong Kong
study. Engineering, Construction and Architectural Management.
Lupton, S., 2019. Which Contract?: choosing the appropriate building contract. RIBA
Publishing.
Online
Dispute resolution methods. 2019. [Online]. Available through
<https://www.adjudication.org/resources/articles/nec4-fidic-approaches-dispute-avoidance-
dispute-resolution-compared>
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