20 Design-Bid-Build Contractual Mechanisms & NEC3 Application

This report delves into the application of NEC3 contractual mechanisms within the context of design-build procurement, specifically focusing on the construction of a suspension bridge. It begins with an introduction to the challenges inherent in civil engineering projects, particularly the adversarial nature of traditional contracts and the importance of effective communication and collaboration. The report reviews the evolution of NEC3, from its early beginnings to the third edition, highlighting its core principles and the benefits it offers, such as simplicity, flexibility, and efficient project management. A significant portion of the report is dedicated to outlining the pre-award and post-award stages of contractual processes, including securing management approval, assembling project teams, and defining the reasons for establishing contracts. The report also explores the literature review of contractual mechanisms, the history of NEC3, and the application of NEC3 in construction projects. The report further outlines the research methodology, including qualitative and quantitative research approaches, questionnaire design, and ethical considerations. The report concludes with a discussion of the findings and recommendations for implementing NEC3 in construction projects, emphasizing the potential for improved project outcomes and reduced disputes.

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DESIGN-BID-BUILD CONTRACTUAL MECHANISMS AND APPLICATION OF NEC3
TO DESIGN-BUILD PROCUREMENT STRATE
By Name
Course
Instructor
Institution
Location
Date

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TABLE OF CONTENT
1.0 Introduction..........................................................................................................................4
2.0 Literature review/materials..................................................................................................5
2.1 Contractual mechanisms...................................................................................................5
2.2Pre-award stages................................................................................................................5
2.3 Why the contract is being established?............................................................................7
2.4 Post-award stage...............................................................................................................9
3.0 The history of NEC3............................................................................................................9
3.1 Early Beginnings...........................................................................................................9
3.2 First Edition................................................................................................................10
3.3 The Second Edition.....................................................................................................11
3.4 The third Edition.........................................................................................................11
4.0 Appraisal of NEC3.............................................................................................................13
4.1Benefits of NEC3.....................................................................................................14
4.2 Limitations of the NEC3.........................................................................................17
4.3 Recent uses of NEC3..............................................................................................18
5.0 Research Methodology.......................................................................................................18
5.1 Approach to Research design..............................................................................19
5.2 Qualitative research.............................................................................................20
5.3Research Proposal................................................................................................20
5.4 Quantitative Research..........................................................................................21

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5.41Questionnaire......................................................................................................21
5.5 Type of Data........................................................................................................22
5.6 Pilot Studies.........................................................................................................23
5.7 The Research Sample..........................................................................................23
5.8 Ethical considerations..........................................................................................25
5.9 Limitations...........................................................................................................25
6.0 Discussions.........................................................................................................................25
7.0 Conclusion..........................................................................................................................30
8.0 Bibliography.......................................................................................................................35

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CONSTRUCTION OF A SUSPENSION BRIDGE
1.0 Introduction
In many parts of the world, the construction of Civil engineering projects is very adversarial.
This is particularly evident in the construction of a suspension bridge where the relationship
among the contracted project team is regularly edgy, mostly among the client and the main
contract that is due to the difference in their aims and major objectives which are to protect
individual interests (Affairs, 2016, p. 345).
There are many issues that surround the construction of the suspension bridge. The two main
problems are the disputes which arise due to the poor communication and lack of
collaboration between the different parties who are engaged in the execution of the project.
The New Engineering Contract (NEC3) offers the best solution to the problems encountered
during construction of civil engineering projects and achieves practically all the requirements
for the modern contract.
Suspension bridge is defined a bridge whereby the load-bearing part is suspended underneath
suspension cables on the vertical suspenders. Early 19th century the first ever suspension
bridge was constructed. Suspension cables which are used must be anchored at each other at
the end of the bridge; this is because any load which is applied to the bridge is transformed
into tension in the main cables (Alampalli, 2017, p. 32). The main cables which are used in
this bridge extend beyond the pillars to the deck-level supports, and further continues beyond
the pillars to the deck-level supports and continue to connect with the anchors which are
located at the ground.
The deck (load-bearing portion) is supported by vertical suspender rods which are referred to
as hangers. In many situations the towers may be placed on a canyon or a bluff edge. The rod
may then proceed straight to the major span, or the bridge will in most cases have two smaller

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spans which link either pair of the pillars and the highway which may be supported by the
suspenders cables or apply a truss bridge to make this link.
This research will be a selection of different types of contracts, contractual mechanisms uses
and interpretation of the NEC3 standard contract form within the construction of suspended
bridge so that it runs smoothly from the start to the end (Alger, 2010, p. 648).
2.0 Literature review/materials
2.1 Contractual mechanisms.
Contracts are considered to be essential pieces of information which make a binding
obligation between two or more parties, hence being evidence that there is a contract which is
existing. The contract documents usually take the form generally to the extent and the nature
of the contract which they represent (Ashworth, 2011, p. 76). The contract documents are
used by the people who are involved in the execution of the engineering projects such as the
engineers, architects and the contractors to convey legal, technical ideas and messages to
different parties in the contract. Due to the reasons which are discussed above, it is very
significant that a uniform approach to the interpretation and production of the contract
documents to be focused throughout the entire construction industry (Birch, 2015, p. 897).
2.2Pre-award stages.
The Upstream or pre-award activities include the following activities.
 Securing a management approval and preparing project case.
All the contracts which are signed are predicated on the urge to obtain the management
commitment and approval at all the appropriate level. It involves the generation of a sound
project case which is aligned with the organisation's functional and corporate strategies
(Broome, 2015, p. 125).

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The project case sets out the policy, project and the objectives of the contract and all the
issues which affect the decision of the project implementation.
 Assembling the project team which will be tasked with the management of the contractual
procurement.
The need to assemble a team to manage a contractual procurement programme which will be
determined by a number of factors such as the scale of the project, complexity, nature, the
significance of the procurement and the necessary skills and experience but also by the extent
to which it is considered appropriate, beneficial or a requirement to comply with
organisational policy to involve stakeholders in the project. The figure below summarises all
the pre-award activities (Burr, 2015, p. 845).

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2.3 Why the contract is being established?
The reasons why most of the engineering projects have contracts are: To hold a reasonable
balance between the interests and the requirements of the parties who are involved in the
construction of the suspension bridge (Castleman, 2016, p. 729).

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The contract also allocates the roles, responsibilities and the risks between the contracting
parties. In most cases, the parties which are contracting will react favourably to the
obligations which are stated.
The reasons why the contract has to be established was to avoid increased costs,
unsatisfactory performance and disputes which are likely to rise if the trust which is needed
to exist between the parties in a construction contract is lacking. The issues which are
mentioned above are likely to rise if there is no trust among the members of the project team.
The contract is also established to reduce the delays in the execution of the project. Before
the parties come in a contract, there has to be well-set deadlines on how the project will be
implemented (Chappell, 2011, p. 90). The contractor who will be in charge of the execution
of the project together with the subcontractors will work towards meeting the deadlines thus
reducing the delays which were to be observed if there was no contract/agreement.
The contract is established to improve the overall quality of the project. Once the different
parties have agreed. The standards which they are expected to meet are set, and thus the
various parties will hire experts in their area to ensure that the quality of their output meets
the standards which were set. In that the overall quality of the project improves (Chappell,
2016, p. 762).
To increase the flexibility of the project. The contract which the project members enter
ensures that all the roles and responsibilities of the project are well outlined and what each
member is expected to do is also outlined to enable the members to be aware of what is
expected from them. After all the roles and tasks have been assigned to each of the members,
there is always room for adjustments to be made which increases the flexibility of the project.
For easy management of finance (Chun, 2013, p. 189). Different parties enter into the
contract with the exact recourses which are required to carry out the implementation of the

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task in that way the different parties which are involved in the execution of the project does
not misuse the resources which are allocated to them.
All the parties which are involved in the implementation of the project are expected to deliver
in service and technical terms, including the legality of the project and contractual processes
about the domestic law of Sultanate of Oman (Dayaratnam, 2010, p. 42). After the contract
has been awarded to the parties which will be involved in the execution of the project, they
will be expected to deliver exactly what was agreed on.
2.4 Post-award stage
The foundation for successful and effective post-award contract management in most cases
depends on comprehensive, careful and implementation of the pre-award and the upstream
activities.
3.0 The background of NEC3
3.1 Early Beginnings
The UK institution of civil engineers, in 1885 conducted a review of the construction
contracts and the civil engineering designs. In 1986 the creation of the new form of the
contract was commission by the institution of civil engineers which was then chaired by Dr.
Martin Barnes (CBE).
The major reasons behind this approach of procurement were to provide (Elms, 2013, p.
290):
 Simplicity and clarity to shift from the legal processes which promoted the use of
traditional contracts.

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 To enhance the flexibility of projects. To allow the different plans of contracts for
various construction and engineering fields, and the choice to apply the contract in
various countries in the world.
 Encouragement to efficient and reliable project management
The first Edition of the NEC contract was published in 1993. After eight years of
development (Energy, 2010, p. 256). Currently it has been successful to publish up to
the third edition as discussed below.
 1993 :1st Edition
 1995:2nd Edition (ECC)
 2005:3rd Edition
3.2 First Edition
Latham Report (1994) coincided with the introduction of the NEC, which led to the review of
the UK construction and engineering industry and gave the recommendations on how it was
to be improved. In the Latham Report (1994) it endorsed by saying that the first edition met
11 of the 13 principles which are characterized by a modern contract form which is available
at that given time (Forward, 2011, p. 321).
The 12 principles have a lot of relevance currently. Below are the 12 principles
i. Teamwork and win-win solutions
ii. Risk allocation
iii. An integrated package of documents
iv. Trust fund routes of payment
v. Simple language and guidance notes
vi. Provision for variations
vii. Separation of roles

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viii. Speedy dispute resolution
ix. The duty of fair dealing to all parties
x. Incentives
xi. Advanced mobilisation
xii. The mechanism for interim payments
3.3 Second edition
The NEC3, 2nd edition was tasked by the Construction and Engineering Contract to come up
with a theory which was not only for the civil engineering projects (Gerber, 2014, p. 438).
The term NEC started being used as the name a range of contracts, which included:
 Professional Services Contract for consultants(ICE, 1995)
 Construction Subcontract and Engineering for subcontractors(ICE, 1995)
 Adjudicator’s(ICE, 1995) Contract
3.4 Third Edition
In 2005 the 3rd edition of NEC was published and was referred to as NEC3 (Gransberg, 2011,
p. 265).
The third edition of the NEC (NEC3) consists a suite of 23 contract documents which are
interlocking and the guideline books some of them are listed below.
 Construction and Engineering Contract (ECC)
 Construction and Engineering Subcontract (ECS)
 Construction and Engineering Short Contract (ECSC)
 Construction and Engineering Short Subcontract (ECSS)
 Term Service Contract (TSC)

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 Professional Services Contract (PSC)
 Adjudicator’s Contract
 Flow charts for each contract
 Framework Contract (FC)
 Guidance notes
 Guide to contract strategies and procurement.
Figure1: The NEC3 schematic diagram Suite of Contracts
The NEC3 contract is comprised of:
 Nine core clauses.
 Title
 Time
 Termination
 Testing and Defects
 Payment