Overview of NEC4

Matthew Smith - Partner

© Copyright 2017 by K&L Gates LLP. All rights reserved.

WELCOME
 Welcome to our overview of the new NEC4 ECC
 Briefing coverage:
 Overview – setting the scene: what’s changed, what’s
the same and where we go from here
 Programme and time-related issues
 Key changes to the payment provisions, Main Option
clauses and SoCC
 Other key changes and the extent to which the NEC
has addressed some of the perceived ‘gaps’ in the
coverage of the NEC contracts
 Focus on ECC rather than other forms – topics for
another day!
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BACKGROUND TO NEC4
 NEC4 has been a long time coming
 NEC3 published in 2005
 Updated in 2013 (LDEDC) and via supplements to
address specific issues e.g ECI and BIM
 In parallel:
 market testing of other forms,
 accumulation of ‘best practice’ changes,
 acknowledgement of Z-clauses that just won’t go away
 All brought together in NEC4 along with a few
surprises and points to ponder further

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NEC4 OBJECTIVES
 The NEC stated that it had 3 objectives in
drafting NEC4:
 Provide greater stimulus to good management
 Support new approaches to procurement which
improve contract management
 Inspire increased use of NEC in new markets and
sectors
 As the NEC4 User Guide states “It was to be
evolution, not revolution”

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HOW HAS THE DRAFTING SOUGHT TO
ACHIEVE THOSE OBJECTIVES?
 Greater stimulus to good management – e.g.
 Refinements to the early warning and programme
provisions including ‘treated’ acceptance of the programme
 Incentivising Scope improvements via whole life cost
provisions (X21) and the cost incentives of the new
Contractor’s proposals provisions (cl 16)
 Requirement for the Project Manager, when replying to a
communication, to give reasons “with sufficient detail to
enable the Contractor to correct the matter” (cl. 13.4
 Quality management system (new cl 40)

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HOW HAS THE DRAFTING SOUGHT TO
ACHIEVE THOSE OBJECTIVES?
 Supporting new approaches to procurement - e.g.
 Overhaul of X15 to be a D&B option
 Incorporating ECI into a new secondary option X22
 Use of new forms such as a multi-party Alliance
Contract and new DBO Contract

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HOW HAS THE DRAFTING SOUGHT TO
ACHIEVE THOSE OBJECTIVES? (CONT.)
New markets and sectors – e.g.
 Minimising the differences between the ECC and other NEC
forms (PSC, TSC etc) to flatten the learning curve for new users
 Providing enhanced guidance – e.g. 4 volumes of Users’ Guides
dealing with:
 establishment of a procurement and contract strategy (Vol 1)
 preparing an NEC contract (Vol 2)
 selecting a supplier (Vol 3)
 managing an NEC contract (Vol 4)

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KEY FEATURES OF ECC4
 Basic structure and content unchanged
 Numerous terminology changes (not otherwise of
major significance)
 Project management refinements
 Expanded in-contract cost finalisation mechanisms
 Provisions for final assessment to become
conclusive
 Incorporation of a party-led dispute avoidance
mechanism via senior representatives process

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TERMINOLOGY CHANGES
 Many changes of style rather than substance e.g
 Employer becomes Client
 Works Information becomes Scope
 Minimising differences between the various NEC
contracts
 Changes to better reflect reality e.g
 Risk Register is re-named the Early Warning Register
and risk reduction meetings become early warning
meetings
 Narrowing of the definition of Subcontractor
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NEXT SESSIONS
 Time and programme issues
 Changes to the payment provisions
 Other significant changes

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Programme & Planning implications
Paul Greenwell
NEC3 v NEC4

Paul Greenwell

05 July 2017 making the difference

NEC 3 v 4
Programme & Planning implications
An initial view from the T&T Forensic Planning team

making the difference

05 July 2017
Audience Bias Check

Who is “for” NEC as a preferred form of Contract?

Who is “against”?

Contractually agnostic?

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Introduction

The key problem associated with NEC3 in respect of planning and

programming

How to operate the Contract mechanisms to evaluate Compensation

Events (CEs) when the programme approval mechanism has not
been successfully maintained.
■ The volume of CE’s overwhelmed the Project Manager
■ The Project Manager was rejecting programmes unreasonably
■ The Employer Client was influencing the Project Manager etc

The problem is well known.

The causes numerous.

Has NEC4 given us improvements?

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What is supposed to happen.

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The Omni-shambles.

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Does NEC4 help? (part 1 of 3)

What are the key Programme & Planning changes?

3 - TIME
■ 31.2 – “A programme admitted for acceptance is in the form stated in the Scope.” –
- ‘You said P6 but we have only got MS Project. Is that OK?
■ 31.3 - PM failure to accept/not accept …… Is this a significant change?
■ 32.1 - Revised programme no longer requires effects of implemented compensation
events …. Or does it? (Refer to 62.2). Will this make Approval of the programme less
contentious? -
■ 31.2 - Time risk allowance v Time liability allowance – no change here.
■ 31.3 - Work information v Scope – Seems different but the definition is the same.
■ 36 – Acceleration – The Contractor can now propose acceleration rather than being
available only at the Instruction of the PM. The impact of acceptance by the PM is set
out within the clause (acceptance of an acceleration quotation includes acceptance of
the revised programme, whereas implementation of a CE quotation does not include
de facto acceptance of the revised programme.)

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Does NEC4 help? (part 2 of 3)

6 CE’s
■ 60.1 - New CE’s
■ (20) PM notifies that quote is not accepted – Can this be used to recover disruption /
management time due to multiple quotation requests?
■ (21) Additional CE’s in Contract Data (not in Z clauses).

■ 61.4
■ “…has not been notified within the timescale.” Added to list of reasons not to change
price and roles. Various switch arounds of assumptions but no apparent changes.

■ 62.2
■ Prospective programme changes remain – impacted programme approach remains
unchanged but see 63.5 below.

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Does NEC4 help? (part 3 of 3)

63 Assessing CE’s
■ 63.1 - The dividing date brought to prominence.
■ “dividing date is” - Date of communication of instruction, notification, certificate, change
of earlier decision.

■ 63.5 – States that the delay to Completion Date due to CE should be measured
against the Accepted Programme current at the dividing date – as previously in 63.3
BUT
…and this is the exciting bit…
■ 63.5 adds the words:
“When assessing delay only those operations which the Contractor has not completed
and which are affected by the compensation event are changed.”
■ 63.8 – The assessment of the effect of a CE includes risk allowances for cost and
time …where these are not CE’s – change of definition.
■ 63.9 – New – the assumption that the Accepted Programme can be changed has
been deleted from 63.9.

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64 Project Manager assessment

■ 64.2 – PM can assess if….

■ “The PM has not accepted Contractor’s latest programme for one of the reasons stated
in the Contract.”
■ A new reason but not really changing anything as previously the PM could assess if there is
no Accepted Programme.

■ 65 – Proposed instructions.
■ New – PM may instruct quotation for a proposed instruction.

■ 66.3 – Assessment of an implemented CE is not revised except as stated in these

conditions…..[“correction of forecast upon which the CE was based” is now deleted].
■ As 61.6 – “…the PM notifies a correction.” and “60.1 (17) The PM notifies…a correction
to an assumption” any conflict between these clauses is now removed.

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And finally….

Key points
■ 31.2 - Submit in the form stated
■ 31.3 - If Project Manager does not notify acceptance – route to acceptance set out.
■ 32.1 – Removal of CE identification in Approved Programme. Will this make approval less
controversial?
■ 63.5 - The dividing line is defined and the limits to impacting as planned programmes may
be clearer:
■ “When assessing delay only those operations which the Contractor has not completed and which are
affected by the compensation event are changed”.
■ Which I take to mean – actual dates remain as actual and impacting of CE starts from that point
(the dividing line?).
■ Therefore when implementing 62.2 – “…the programme for remaining work is altered” only for work
not completed. The Impacted programme proceeds from an As built base not Baseline or last
Approved Programme (whenever that was).

■ 66.3 - Forecast can be revisited

Answers sought on impact of:
■ 63.9 - deletion of “and the Accepted Programme can be changed”.

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Is NEC4 better than NEC3?

Marginally

More rearranged

Some wording may be better

I think the limitations on Impacted As Planned approach are positive

(but I may be reading more in than is intended).

But NEC form remains a challenge to the orthodox confrontational

contractual approach.

Have any opinion changed today (provisionally)?

Thank you.

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A final thought

All programming tools,

All records,
All contracts,
Are hopeless and appalling,
But the alternative is nothing,
And nothing is worse.

If we rail against NEC4 we are as fish who are angry with the sea.

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25
Changes to Payment Provisions
Nicola Ellis – Special Counsel
INTRODUCTION
 Application for Payment
 Final Assessment
 Defined Cost
 Schedule of Cost Components
 Short Schedule of Cost Components
 Compensation Events

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APPLICATION FOR PAYMENT CLAUSE 50.2
 Contractor submits application for payment
before assessment date:
 sets out the amount due
 include details of how the amount was assessed
 in the form stated in the Scope.
 Project Manager considers application in
assessing the amount due.
 No timeframe but consider giving Project
Manager sufficient time to consider the
application.
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APPLICATION FOR PAYMENT CLAUSE 50.4
 If no application is submitted, the amount due is
the lesser of:
 “the amount the Project Manager assesses as due at
the assessment date assessed as though the
Contractor had submitted an application before the
assessment date, and
 the amount due at the previous assessment date.”

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APPLICATION FOR PAYMENT CLAUSE 50.4
 No application, no increase in the amount due.
 The amount due may decrease, e.g. delay
damages.
 Discourages the Contractor from not making an
application in such circumstances.

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TIMING OF ASSESSMENT DATES
 Assessment dates are at the end of each
assessment interval until the Defects Certificate
or a termination certificate (50.1)
 No additional assessment at Completion.

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FINAL ASSESSMENT CLAUSE 53.1
 Project Manager assesses final amount due, if
any, no later than:
 4 weeks after the Defects Certificate or
 13 weeks after a termination certificate.
 Project Manager gives details of how the amount
is assessed.
 Payment is made within 3 weeks of the
assessment or any other date stated in the
Contract Data

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FINAL ASSESSMENT CLAUSE 53.2
 If the Project Manager does not assess within
the times stated, the Contractor issues its own
assessment to the Client.
 The Client may agree and then pay within 3
weeks or such other time stated in Contract
Data.
 No requirement for a default notice to the Project
Manager.

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FINAL ASSESSMENT CLAUSE 53.3
 Assessment (by Project Manager or Contractor)
is conclusive.
 What if the final amount is not agreed?
 A Party must take action in accordance with the
relevant dispute resolution option selected.

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FINAL ASSESSMENT CLAUSE 53.3
 If W1/W2 are selected, a Party:
 refers to Senior Representatives within 4 weeks of the
assessment,
 refers any issues still not agreed to Adjudicator within
3 weeks of list of issues not agreed (or when it should
have been produced)
 refers Adjudicator’s decision to the tribunal within 4
weeks of decision.
 If W3 is selected, a Party refers to Dispute
Avoidance Board, and then the tribunal within 4
weeks of a recommendation.
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FINAL ASSESSMENT CLAUSE 53.4
 Final amount due is changed to reflect:
 any agreement between the Parties,
 decision of the Adjudicator or DAB unless referred to
tribunal within 4 weeks.
 A changed assessment is conclusive of the final
amount due.

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Y(UK)2: HOUSING GRANTS, CONSTRUCTION
AND REGENERATION ACT 1996
 Y2.2 – includes when the final amount becomes
due:
 If Project Manager assesses after Defects Certificate,
5 weeks after Defects Certificate,
 If Contractor assesses after the Defects Certificate,
one week after its assessment,
 If Project Manager assesses after termination
certificate, 14 weeks after the termination Certificate.
 Above assessments will be payment notices.
 Notified sum may be zero
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Y(UK)2: HOUSING GRANTS, CONSTRUCTION
AND REGENERATION ACT 1996
 Y2.4 – if the Client terminates for R1-R15
(insolvency), R18 (Contractor default) or R22
(Corrupt Acts) and a certified payment is
outstanding, it is paid unless:
 Client notifies Contractor it intends to pay less or
 any of R1-R15 occurred after the last date on which
the Client could have notified that it intended to pay
less.

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ACCEPTANCE OF THE DEFINED COST
(CLAUSE 50.9 OPTIONS C, D, E AND F)
 Contractor notifies Project Manager when part of the
Defined Cost has been finalised and makes available
any records. Project Manager must review records and
respond within 13 weeks.
 If required, the Contractor provides further records or
corrects errors within 4 weeks and Project Manager
reviews and responds within 4 weeks.
 Treated as accepted if Project Manager does not notify
within time stated.
 Proactively deals with Defined Cost rather than leaving
the Contractor’s records open indefinitely.

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DEFINED COST
 Options A and B, Clause 11.2(23)- all cost goes
through the Short Schedule of Cost
Components, including in respect of
Subcontractors.
 Options C, D and E, Clause 11.2(23) - all cost
goes through the Schedule of Cost Components,
including in respect of Subcontractors.
 Option F, Clause 11.2(25) – amounts paid to
Subcontractors without paying/retaining twice
and the prices stated in the Contract Data.
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FEE
 11.2(10) - Single fee percentage replaces
subcontracted fee percentage and direct fee
percentage.
 Includes all costs not in Defined Cost together
with profit and risk allowances.

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OTHER MAIN OPTION CHANGES
 Prices (Options E and F) – forecast Defined
Cost for the whole of the works. Common
amendment for clarity.
 Disallowed Cost (Options C, D, E and F) -
costs incurred only because the Contractor did
not notify of preparation for and conduct of
proceedings against a Subcontractor

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SCHEDULE OF COST COMPONENTS
 Options C, D and E.
 No option to use SSCC for CEs.
 4 – Payments to Subcontractors without taking
account of amounts paid or retained which
would result in the Client paying or retaining
twice.

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SCHEDULE OF COST COMPONENTS
 5 – Charges
 Deletion of Working Area overhead.
 6 and 7 - removal of overhead percentages for
 manufacturing and fabrication, and
 design.
 Replaced with people rates in the Contract Data
applied to total time spent outside of the Working
Areas.

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SHORT SCHEDULE OF COST
COMPONENTS
 Only Options A or B.
 Payments to Subcontractors
 People Rates applied to time spent within
Working Areas
 Replicates ‘charges’ section in SCC
 No people overhead
 Rates for people instead of overhead
percentages for manufacture and fabrication and
design (as in SCC).

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COMPENSATION EVENTS
 New compensation events:
 60.1(20) – Quotation for a proposed instruction which
is not accepted
 60.1(21) – Additional compensation events stated in
the Contract Data
 Clause 63.1 introduces a ‘dividing date’
 for events arising from the Project Manager or
Supervisor, the date of the communication
 otherwise the ‘dividing date’ is the date of the
notification of the compensation event

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PROPOSED INSTRUCTIONS CLAUSE 65
 Project Manager may instruct the Contractor to
submit a quotation for a proposed instruction
 If the Project Manager does not reply to a
quotation, it is not accepted.
 60.1(20) CE is given for quotation which is not
accepted.
 Cost of preparing quotations for CEs is no longer
excluded under Options A and B.

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SCOPE CHANGES
 Clause 16 Contractor’s Proposals
 Contractor may propose changes to the Scope to
reduce cost.
 If it is accepted, it is treated as a CE and the Prices
are reduced (using the value engineering percentage
for Options A and B).
 X21 Whole Life Cost
 the Contractor may propose a change to reduce the
cost of operating and maintaining an asset.
 If accepted, not a CE.

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Further significant changes
Inga Hall – Special Counsel
NEW CLAUSES
 Corrupt Acts (cl 11.2(5) and 18)
 Assignment (cl 28)
 Disclosure/publicity (cl 29)
 Quality Management System/Plan (cl 40)
 Undertakings to Client or Others (X8)
 BIM (X10)
 Whole Life Cost (X21)
 ECI (X22)

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NEW CLAUSES: CORRUPT ACTS
 Corrupt Acts
 New defined term (cl 11.2(5))
 Defined generically rather than with reference to
specific legislation (e.g Bribery Act) to be jurisdiction-
neutral
 Z-clause amendment likely to tighten definition
 Contractor must not do a Corrupt Act and must take
action to stop a Subcontractor’s/supplier’s Corrupt Act
of which it is or should be aware (cl 18.1, 18.2)
 Obligation to flow this down into subcontracts (cl 18.3)

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NEW CLAUSES: ASSIGNMENT
 New assignment clause (cl 28):
 Either Party notifies the other if they intend to assign
the contract or any rights under it
 Only qualification is that the Client may not assign if
the receiving party “does not intend to act in a spirit of
mutual trust and co-operation” – how would the Client
know?
 Neither cl 28 or 29 covered in User Guide
 Z-clause amendment likely to add ‘usual’ additional
qualifications re restrictions on Contractor’s right to
assign, notice requirements, and numerical limit
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NEW CLAUSES: DISCLOSURE & PUBLICITY
 New disclosure and publicity clause (cl 29):
 Neither Party to disclose “information obtained in
connection with the works except when necessary to
carry out their duties..” (cl 29.1)
 Contractor only to publicise the works with the Client’s
agreement (cl 29.2)
 Both very limited provisions, expansion via z-clause
amendment is likely e.g
 Defined categories of information
 Sources of information
 Necessary exclusions (public domain, professional advisers,
employees etc.)
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NEW CLAUSES: QMS
 Section 4 (Defects) now begins with a new quality
management system clause:
 Contractor obliged to operate a QMS – detailed requirements to
be included in Scope (cl 40.1)
 Scope could say no QMS needed but unlikely – most contractors
would operate one anyway
 Quality policy statement and quality plan to be provided to the
Project Manager for acceptance within time scales set out in
Contract Data (cl 40.2) – obligation regardless of whether the
Scope requires any particular form of QMS
 The Project Manager can instruct the Contractor to correct a
failure to comply with the quality plan (not a CE) (cl 40.3)
 Implications of failure to comply with acceptance process not
clear – Disallowed Cost?
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NEW CLAUSES: X8 UNDERTAKINGS
 NEC4 now includes a collateral warranties
option:
 The undertakings to Others are set out in the Contract
Data (X8.1)
 Contractor obliged to arrange for Subcontractor
undertakings to Others and to the Client (X8.2 and
8.3)
 Bespoke forms to be included in Scope (no NEC4
forms)
 Required to be completed within 3 weeks, but no
sanction if not (likely Z-clause amendment)
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FURTHER SIGNIFICANT CHANGES TO
EXISTING CLAUSES
 Design and intellectual property rights
 Subcontractors
 Defects
 Liabilities and insurance
 Termination
 Dispute resolution
 Secondary Options

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DESIGN AND IPR
 No substantive changes to clauses 20 – 23
 New IPR provisions - Not centrally contained in one clause
 Cl 22.1
 new obligation for Contractor to obtain equivalent rights from Subcontractors
for Client to use Subcontractor’s material
 stops short of licence requirements often included via Z-clauses
 Cl 74.1
 new provision stating that the Contractor has the right to use material
provided by the Client - but only to Provide the Works - and that the
Contractor may make this right available to a Subcontractor
 X9 Transfer of Rights
 transfer of Contractor’s rights over design materials to Client
 Extensions and carve outs to basic position set out in Scope – clause only
as good as content of Scope
 Obligation on Contractor to arrange equivalent transfer from Subcontractors
 X15 RSC provisions
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DESIGN AND IPR (CONT.)
 X15 reasonable skill and care standard has
shifted
 No single-point design responsibility drafting,
often added as an additional secondary option
via Z-causes

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SUBCONTRACT ISSUES
 Clearer definition of who a Subcontractor is
(11.2(19) to remove ‘routine’ suppliers
 Tightening of the Project Manager approval
process in cl 26 i.e. all subcontract documents
(except pricing information) now to be provided
for review, not just conditions of contract
 No change to the list of express reasons for non-
acceptance, and Z-clauses expanding that list
are common

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DEFECTS
 QMS obligations (cl 40)
 Greater clarity over when the Defects Certificate
is issued (cl 44.3)
 NEC3- at the later of the defects date and the end of
the last defect correction period
 NEC4 – at the defects date if there are no notified
Defects or otherwise at the earlier of
 the end of the last defect correction period and
 the date when all notified Defects have been corrected
 Contractor on the hook until all notified Defects in fact
corrected, rather than being ‘timed out’
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RISKS V LIABILITIES
 NEC3 approach:
 Anything that was not an Employer’s risk (set out in cl 80.1 s.t Z-
clause amendment) was a Contractor’s risk (cl 81.1)
 Nothing could fall between the gaps
 NEC4 approach:
 Terminology changes to “Client’s liabilities”
 Scope of cl 80.1 largely unchanged other than fault/design fault
provision expanded
 Matters which are Contractor’s liabilities now listed in cl 81.1 – a
non-exhaustive list
 User Guide gives no guidance on the new approach

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LIABILITIES AND INSURANCE
 The Contractor’s liabilities (unless stated in the
Contract Data as being Client’s liabilities) listed
in cl 81.1 are liabilities typically covered by
insurance i.e.
 Claims and proceedings arising in connection with the
Contractor Providing the Works
 Loss of, or damage to the works, Plant, Materials and
Equipment
 Property loss or damage
 Death or bodily injury

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LIABILITIES AND INSURANCE (CONT.)
 Cl 81.1 does not contain any ‘catch all’ provision
regarding other liabilities – Clients likely to seek to
address perceived gap via Z-clause amendment
 NEC4 removes reference to “indemnity” with the NEC3
cl 83.1 mutual indemnity provision replaced with
“recovery of costs” provisions
 Cl 82.1 – Contractor to pay any cost which the Client has paid
(or will pay) as a result of an event for which the Contractor is
liable

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LIABILITIES AND INSURANCE (CONT.)
 Cl 82.2 – Client to pay any cost which the Contractor has paid
(or will pay) to Others as a result of an event for which the Client
is liable – Contractor’s own costs will be recovered through the
CE mechanism
 “any cost” reference in cl 82.1 and 82.2 less clear than NEC3
indemnity reference to “claims, proceedings, compensation and
costs” – likely to be narrowed by amendment
 Cl 82.3 – NEC3 reduction for contributory fault provision remains
 NEC3 cl 82.1 positive obligation on the Contractor to promptly
replace/repair damage to the works etc. until issue of the Defects
Certificate has been deleted

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INSURANCE PROVISIONS
 Insurance provisions largely unchanged other than:
 New obligation on the Client to provide stated insurances (under
NEC3 only the Contractor had an express obligation to do so) –
cl 83.1
 Reference now made to the strength of the insurer’s commercial
position as a factor which the Project Manager can take into
account in accepting insurances – a common Z-clause
amendment (cl 84.1, 86.1)
 Reference to PI cover now included in X15
 NEC3 cl 85.4 deleted i.e. that any amount not recovered from an
insurer was borne by the party who bore the risk of the event –
significant in the context of the liability gap which potentially now
exists in NEC4 between Client’s liabilities (cl 80.1) and
Contractor’s liabilities (cl 81.1)
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TERMINATION
 Termination provisions also largely unchanged,
other than:
 NEC3 Employer’s termination for convenience right
(NEC3 cl 90.2) deleted and replaced with a
Secondary Option clause (X11) but procedures and
amounts due unchanged
 Termination for a Corrupt Act in certain circumstances
included as a new reason (cl 91.8, R22)

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DISPUTE RESOLUTION (W2)
 Provision made in W2.1 for referral to Senior
Representatives if the Parties agree
 Process is drafted tightly re length of
submissions and time period allowed for this
stage (W2.1(2), (3))
 Not disclosable in any subsequent proceedings
 Equivalent provisions also included in W1 and a
new W3 (Dispute Avoidance Board) included –
not applicable for Construction Act contracts

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SECONDARY OPTION CHANGES
 X4 – PCG
 reference included to PCG coming from the ultimate parent (a common Z-clause
amendment)
 scope for the Contractor to proposed alternate mid-structure guarantor instead
 X12 – Partnering
 now called “multiparty collaboration”
 A ‘softer’ in-contract alternate to new Alliancing Contract approach?
 X15 – RSC
 appears to reverse burden of proof:
 NEC3 – Contractor not liable for design defects if he could prove that he used
“reasonable skill and care to ensure that his design complied with the WI”
 NEC4 – Contractor not liable unless it failed to carry out design using “the skill and care
normally used by professionals designing works similar to the works”.

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SECONDARY OPTION CHANGES (CONT.)
 X15 – RSC (cont.)
 may not be consistent with standard PI insurance obligations
 ‘professionals’ an ambiguous term: cf engineer, architect, D&B builder
 Additional provisions at X15.3-X15.5:
 Contractor can use material it created under the contract on other projects
unless Scope says otherwise or ownership transferred under other IPR
provisions (X15.3)
 New obligation for the Contractor to retain design documents for the period
of retention (X15.4) – linked to common Z-clauses re Minimum Record
obligations and audit rights
 PI insurance obligation included at X15.5 (commonly addressed as a Z-
clause amendment to insurance provisions) – not expressly linked to other
Section 8 insurance obligations

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SECONDARY OPTION CHANGES (CONT.)
 X16 – Retention
 New X16.3 providing for a retention bond if stated in
the Contract Data
 Not expressly stated to be in lieu of retention sum, but
clearly the intention
 No form of retention bond provided by NEC

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Z CLAUSES STILL LIKELY TO BE NEEDED?
 To further develop new provisions e.g
assignment
 To address issues which remain unchanged in
NEC4 e.g
 Contract Date definition and linkages to a form of
agreement and order of priority clause
 Construction-standard warranties and undertakings
regarding deleterious materials, integration with other
works etc.

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