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NEC Contracts Options: Everything You Need to Know

NEC contracts are a popular type of contract used in the construction industry. These contracts are known for their flexibility and the various options they provide to both parties involved in the contract. In this article, we will be discussing the different NEC contracts options that are available and what they entail.

NEC contracts are widely used in the UK construction industry and are also used in many other countries around the world. The NEC contracts options are designed to meet the specific needs of different projects and to ensure that both parties involved in the contract have a clear understanding of their responsibilities.

Option A: Priced contract with activity schedule

Option A is a priced contract with an activity schedule. This option is used when the scope of work is well defined, and the contractor can provide a detailed pricing schedule for the work. The activity schedule is used to set out the construction programme and the planned sequence of work. Option A is the most commonly used NEC contract option.

Option B: Priced contract with bill of quantities

Option B is a priced contract with a bill of quantities. This option is used when the scope of work is less defined, and the contractor cannot provide a detailed pricing schedule for the work. The bill of quantities is used to break down the work into smaller, quantifiable elements that can be priced individually.

Option C: Target contract with activity schedule

Option C is a target contract with an activity schedule. This option is used when the scope of work is not yet fully defined, and the contractor is required to work collaboratively with the client to develop the project. The activity schedule is used to set out the construction programme and the planned sequence of work. The target cost is agreed between the contractor and the client, and any savings or overruns are shared between the two parties.

Option D: Target contract with bill of quantities

Option D is a target contract with a bill of quantities. This option is similar to Option C, but the work is broken down into smaller, quantifiable elements that can be priced individually. The target cost is agreed between the contractor and the client, and any savings or overruns are shared between the two parties.

Option E: Cost reimbursable contract

Option E is a cost reimbursable contract. This option is used when the scope of work is not yet fully defined, and the client requires the contractor to provide consultancy services to assist in the development of the project. The contract is based on the actual costs incurred by the contractor, plus a fee for overheads and profit.

Option F: Management contract

Option F is a management contract. This option is used when the client requires the contractor to manage the construction project but does not want to take on the risks associated with the construction work. The contractor is responsible for managing the construction process, and the costs are reimbursed to the contractor.

In conclusion, the NEC contracts options provide a range of choices to meet the specific needs of different construction projects. The flexibility of these options allows both parties involved in the contract to be clear about their responsibilities and to ensure that the project is delivered on time, within budget and to the required quality. If you are working in the construction industry, it is important to be familiar with these NEC contracts options and to select the most appropriate option for your project.