Clients are increasingly using the NEC suite of contracts. There are many advantages, but landscape architects need to understand how they work.
Clients routinely need a standard contract in order to procure both landscape design services and to
then realise landscape works on the ground. This article discusses the NEC1 suite of contracts and their relevance to landscape architects. It highlights some of the different approaches that NEC requires compared with more ‘traditional contract’ forms including the JCLI2 contract. If you work with some public bodies or on larger infrastructure projects you may have already come across NEC. The adoption
of NEC is becoming more widespread...
get ready for it!
Your landscape practice may be employed under the NEC Professional Services Contract (PSC). The actual landscape works you design may then be procured under one of the NEC family of contracts.
Landscape works can be:
• a stand-alone piece of soft and/or hard landscape or
• part of a bigger building or infrastructure project.
In the case of maintenance, there can be a standalone requirement for maintenance of an existing landscape asset or a requirement for maintenance by the contractor directly after construction/planting.
This article introduces the possibility of using NEC contracts instead of the JCLI contracts that are likely to be more familiar to many landscape architects.
The options for landscape contracts in
the two suites are set out in the table below.
Background to the NEC contracts
The NEC contracts date back to 1985 when the UK Institution of Civil Engineers (ICE) carried out a review of the contracts available for construction and the problems they were facing – or causing. Out of that came a radical new contract that truly broke the mould. Then called the New Engineering Contract, over time it has developed into the NEC family3 of very similar contracts covering projects, services and professional services. The guiding principles of all the contracts are:
• clarity and
• to stimulate good management.
Although NEC contracts are published by the ICE, they are not in any way restricted to civil engineering. Instead they can be used for defining and then managing any project or service. As indicated in the table opposite, there is a ‘short’ version of each of the ‘main’ contracts which is designed for simpler contracts. The ‘main’ contracts are modular and allow the selection of a range of options appropriate for your contract including a range of payment options. The Engineering and Construction Contract (ECC) can be used for any level of design by the contractor. Each of the main contracts can be used with minor modification as a subcontract – which can be used to pass on obligations and liabilities ‘back to back’ to a subcontractor. In the case of the ECC there is a published Engineering and Construction Subcontract which follows the procedures in the ECC almost word for word. All the contracts are designed to be used anywhere in the world.
NEC contracts are written in plain English with short sentences.
Stimulus to good management
The contracts are designed to be actively used and managed. They provide clear processes for all aspects of contract management and are designed to support – and require – active management of change, cost, time and risk.
The above factors support the fact that the contracts actively encourage collaboration between the parties; this is not a contract for ‘the bottom drawer’!
Lastly the fact that all the NEC contracts have a very similar structure, are based on the same concepts and use the same language allows a regular client to adopt them for all their procurement needs with obvious benefits of standardisation.
The diagram shows the range of contracts in the NEC family available for different stages in the life of an asset.
Where might a landscape architect encounter the NEC?
The NEC is endorsed strongly by the UK government as a good way to spend public money. As a result, more and more public bodies are using NEC for their infrastructure and buildings projects,
not least the Environment Agency, the Highways Agency and, recently, the Defence Infrastructure Organisation4. Private clients in a range of sectors, including water, energy, nuclear and transport, are doing likewise. For example, the NEC was used very successfully to deliver the majority of the infrastructure for the Olympics, not least the land remediation and the Queen Elizabeth Olympic Park.
As an introduction to NEC, the landscape architect might find him or herself employed under the NEC Professional Services Contract (PSC). The PSC is now the contract of choice for many clients. As an example, Mott MacDonald was recently part of a team preparing the Environmental Statement for High Speed 2 – a significant contract under a PSC.
Landscape works are often included as an element of a larger construction contract, for which the NEC has been chosen for all the good reasons listed above. In that case the landscape architect’s drawings and specification will need to be part of what the NEC calls the ‘Works Information’.
After award, the landscape architect might be appointed as or to support the contract administrator under the Engineering and Construction Contract (ECC)5. A main contractor, working under an NEC contract, may elect to subcontract the landscape works. In this case he may be well advised to use one of the NEC’s subcontracts to pass on his liabilities ‘back to back’ to a specialist landscape subcontractor. He would be most likely to use the Engineering and Construction Short Subcontract (ECSC).
The generic advantages of the NEC suite of contracts mean that they can also be used as a basis for a standalone landscape contract. Selection of the most appropriate contract will depend on the size and complexity of the works. If a priced contract with relatively little contractor design is required, the ECSC may be preferred over the more flexible, but more complex, ECC. There is no specific value threshold above which the ECC should be used rather than the ECSC: complexity of the project is typically more relevant. It should be noted that the JCLI contracts are recommended for use for simple landscape works up to a value of £200,000.
Stand-alone landscape maintenance could be the subject of an NEC Term Services Contract (TSC) or more likely the NEC Term Services Short Contract. After new landscape works, the maintenance or ‘aftercare’ of the asset can could be procured under a stand-alone maintenance contract or incorporated in the construction contract as a ‘section’ after the ‘completion’ of the construction/planting as discussed under pitfalls below. Note that there are pros and cons for each approach which are not specific to the NEC.
What are the pitfalls?
All NEC contracts have a first clause requiring that the actors ‘shall act as stated in the contract and in a spirit of mutual trust and cooperation’. This sets the scene and is supported by clear roles, processes and timescales throughout the contract – but you do have to understand and use the contract.
NEC is not specifically tailored to landscape works
As mentioned above, the NEC contracts are not specially designed for any sector and they are definitely not specially designed for landscape. Some minor modification may be required of the conditions using what the NEC calls ‘Z-clauses’. These are often over-used by ill-advised clients and sometimes drafted by people without the required experience. They must be prepared with care.
You need provision for aftercare
As noted above, maintenance/aftercare may be the subject of a separate contract. If, instead, it is added to a construction contract, then a follow-on section for active aftercare – often three to five years for soft works – is likely to be required. The ECC has an option for sections of work but the ‘defects date’, the last date to notify defects (the end of what would be the ‘Rectification Period’ in JCLI), is a single date normally defined as a period after completion of the whole of the works. This is also the date for the release of the second half of retention (if the option for retention is used). If the ‘whole of the works’ includes the section for aftercare of landscape works, then a contractor for a building project with some landscape works will not relish waiting for three or five years for the release of the second half of his retention and being subject to having defects in the construction notified in that period. However, additional conditions to correct this issue can be drafted. The ECSC does not provide for sectional completion at all. However, it is relatively simple to add in the concept of sections from the words of the ECC to provide for the necessary section for aftercare.
Works Information is critical
The NEC contracts are very different from ‘traditional’ contracts – including the JCLI contracts. They do tend to highlight inadequacies in the definition of the requirements in the Works Information, which, rightly, must be prepared very carefully. The ECC and the ECSC can in theory be used for any level of contractor design. This means that, in drafting the Works Information, the landscape architect has to be very clear about what exactly is to be designed by the contractor and what particulars of the contractor’s design are to be submitted for acceptance after award of the contract. All the design team should be trained on the principles of the NEC and understand the language of the contract and the importance of clear Works Information including drawings, specifications and more.
Completion, not ‘practical completion’
JCLI, like its cousins the JCT contracts, uses the concept of ‘practical completion’, a concept that can be the subject of disagreements and disputes. The NEC contracts require the drafter of the contract to positively define in the Works Information exactly what is required for completion.
Theft/ malicious damage
The JCLI provides for a provisional sum for the replacement of plants subject to vandalism. Under the ECC or the ECSC, there is no concept of a ‘provisional sum’ and any damage to the works prior to take over is a contractor’s risk and one he is required to insure against. If a change to this standard ECC risk allocation were wanted an additional condition of contract
would be required.
Active management is essential
Perhaps most importantly, since the NEC contracts were designed to stimulate good management, they do require much more active management than ‘traditional contracts’, including the JCLI contracts. For example, there are detailed requirements relating to programme in the ECC, and in all NEC contracts there is a defined period within which to reply to every communication under the contract. There is a positive requirement for the parties to provide ‘early warning’ of events that might affect the project. All changes to stated requirements and other events at the employer’s risk are required to be notified and managed as what all NEC contracts call ‘compensation events’. These have tight timescales for notification, quotations and assessment to encourage the parties to deal with them during the works rather than letting them fester. There is therefore a need for the parties to get some (ideally joint) training, develop appropriate systems for communications and, for best effect, to adopt an actively collaborative approach to the processes within the contract. In our experience the main ‘pitfall’ is signing up to an NEC contract but then not managing the contract as required, ie ‘acting as stated in this contract’. NEC is very definitely not a contract for the ‘bottom drawer’.
NEC is a modern, well-drafted family
of contracts. It is not specifically designed
for landscape, but with a few careful modifications it can and has been used successfully for landscape works.
Of course, in general, people react against change and it may take some years for NEC to be adopted widely for landscape. If you have a requirement for small, simple works to be carried out by a small specialist landscape contractor, you may well want
to stick to JCLI – but you should at least consider the benefits of the ECSC.
For a project of more significant value
and one where you want more flexibility, consider the ECC. If your landscape work is a part of a bigger infrastructure contract you may well have no choice.
A landscape architect operating in today’s market place cannot ignore the NEC and should at least be considering it when presenting options for contracts to their client. If the NEC is to work for the client, the landscape architect needs to be prepared for it.
Any feedback? Please contact the authors.
1 NEC is the brand for the family of contracts. See www.neccontract.com
2 JCLI is the Joint Council for Landscape Industries
3 The NEC contracts are published by Thomas Telford, a wholly owned subsidiary of the ICE.
4 The EA includes commentary on the use of NEC in its ‘Landscape and Environmental Design Guidance’
5 The ECC contract is administered by a Supervisor (compliance, testing and defects) and a Project Manager (all other aspects of contract management); the ECSC is administered directly by the Employer or an ‘Employer’s Agent’.
Collette Patterson CMLI is principal landscape architect at Mott MacDonald, [email protected] Noor Itrakjy CMLI is a landscape architect at Mott MacDonald, [email protected] Richard Patterson MICE is NEC and procurement specialist at Mott MacDonald [email protected]