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NEC vs JCT 7 th June 2019

NEC vs JCT 7 th June 2019. NEC v JCT. Fergus Aitken BSc MRICS MAPM YORbuild2 Programme Manager East Riding of Yorkshire Council ‘Mr NEC’ Chris Bourne BSc (Hons) MRICS YORbuild2 Framework Manager Scarborough Borough Council ‘Mr JCT’. Opening remarks. History.

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NEC vs JCT 7 th June 2019

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  1. NEC vs JCT7thJune 2019

  2. NEC v JCT • Fergus Aitken BSc MRICS MAPM • YORbuild2 Programme Manager • East Riding of Yorkshire Council • ‘Mr NEC’ • Chris Bourne BSc (Hons) MRICS • YORbuild2 Framework Manager • Scarborough Borough Council • ‘Mr JCT’

  3. Opening remarks

  4. History

  5. National Construction Contracts and Law Survey 2015 This year (2018) JCT has shown a marked growth, and is now at levels not seen since 2011. NEC, which had been growing year on year, has contracted and has returned to the levels that we saw in 2011. Use of bespoke contracts has fallen from 11% to 5%.

  6. Main works contracts

  7. Contract structure

  8. Generally

  9. Project Management/ Contract Administration

  10. Project Management/ Contract Administration

  11. Management input = Similar management input overall

  12. Collaboration/ Partnering

  13. Pricing

  14. Payment

  15. Key bits

  16. Key requirements Time These areas are key: • Cost - timely agreement of the value of changes • Time - how it deals with the programme • Quality – inspection arrangements and defects resolution • Risk – how these are identified and resolved +Risk Quality Cost

  17. Comparison • The following slides compare • the JCT Standard Building Contract (SBC) without quantities 2016 with • NEC3 Engineering and Construction Contract 2013 with Main Option A • as these are understood the most widely used (JCT D&B being a close second)

  18. Cost - variations/ claims generally

  19. Cost - variations/ claims generally

  20. Cost - pros

  21. Cost – pros

  22. Cost - cons

  23. Programme/ Delays

  24. Programme/ Delays

  25. Practical Completion

  26. Quality/ Defects

  27. Risk management

  28. Early warning

  29. Summary pros and cons

  30. Summary – JCT - pros • Building industry is arguably better geared up for it • Arguably provide greater certainty of legal meaning • Some may prefer its specific contract structure • More familiarity within the industry

  31. Summary – JCT - cons • Contain legalese • Are very detailed, contain lengthy sentences, lots of defined terms, lots of cross referencing & can be difficult to understand • Have limited details for processes with timetables to manage issues. • Contracts tend to get left in drawer • Programme is not a binding contract document • Late claims not time barred • Rigid risk management procedures

  32. Summary – NEC - pros • Endorsed for public sector by government • Are flexible • Claim to be clearer and simpler to understand • Act as a stimulus to good management, potentially providing greater certainty of outcome in terms of cost and time • Contain good procedures for managing risk • Encourage parties to work together • Use objective tests (rather than subjective)

  33. Summary – NEC - cons • Contract needs to sit on desk • If not proactively managed, properly understood and resourced from outset problems can arise • Requires careful drafting (e.g. Works Information) • Lack of industry awareness in some quarters (even now) • Disputes often get resolved by Adjudication so findings remain private

  34. Summing up

  35. Contract choice • So which contract would you choose?: • Time – which contract is more likely to ensure the project is finished on time • Cost – which contract will give better value/ more cost certainty • Quality – which contract will give me a better product • Risk – which contract is better at dealing with risk • Both can be used on the YORbuild2 framework.

  36. Q&A/ Close

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