My colleague Gary Rushworth a few days ago set out a brief synopis (click here) of the new updated NEC3 suite of contracts.

Delving a little bit deeper into them, the following points are worth mentioning.

As you might expect with any update the majority of the new NEC3 suite of contracts is similar to its predecessor.

The changes include:

  • Gary rightly pointed out the advent now of a specific project bank account inclusion within the forms, whereas previously it was a separated loose leaf supplement.
  • There are some subtle alterations to a number of the core clauses in the Compensation Events regime:
    • The notification of compensation events procedure has been broadened slightly by referring to the issuing of certificates, let alone giving instructions or changing an earlier decision or assumption.
    • The notification process incumbent upon the PM has been clarified, emphasising the obligation on the PM to inform the contractor its decision on compensation events.
    • Amendments have been made to clauses 62.6 and 64.4 to make it clearer what the consequences are of a PM’s failure to reply to a quotation or to assess a compensation event.
    • There are further subtle alterations in some of the main options in relation to the assessment of compensation events with revisions to clauses 63.13 and 63.14 in a number of the Options.
  • Interestingly the time frame for termination for failure to pay a certified amount is reduced from 13 weeks of the date of certificate to 11 weeks from the due date of payment.
  • As you might expect the Construction Act amendments issued in September 2011 are now in the contract, no longer are they loose-leaf inserts.

There is of course also a new short form Professional Services Contract.

In a nutshell there has been slight alterations to the core clauses and the inclusion of what were loose-leaf “additions” in the new contracts.

The guides will assist users of the new contracts.