NEC Option E: Cost reimbursable contract
NEC was first published in 1993 as the New Engineering Contract. It is a suite of construction contracts intended to promote partnering and collaboration between the parties to a construction contract.
The Engineering and Construction Contract (ECC) is the most frequently used, and can be adopted on projects involving the construction of infrastructure or buildings. It is used for the appointment of a contractor for engineering and construction work, including any level of design responsibility.
It allows for 6 options:
- NEC Option A: Priced contract with activity schedule.
- NEC Option B: Priced contract with bill of quantities.
- NEC Option C: Target contract with activity schedule.
- NEC Option D: Target contract with bill of quantities.
- NEC Option E: Cost reimbursable contract.
- NEC Option F: Management contract.
Option E is a cost reimbursable contract in which the contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee. The financial risk involved is largely taken by the client.
A cost reimbursable contract might be used where the nature or scope of the work to be carried out cannot be properly defined at the outset, and the risks associated with the works are high, such as, emergency work (for example, urgent alteration or repair work, or if there has been a building failure or a fire requiring immediate reconstruction or replacement of a building so that the client can continue to operate their business).
Option E contains the core clauses, secondary option clauses, schedules of cost components, contract data, and so on.
[edit] Related articles on Designing Buildings Wiki
- Conditions of contract.
- Construction contract.
- Contract documents.
- Cost reimbursable contract.
- Defined cost.
- NEC Option A: Priced contract with activity schedule.
- NEC Option B: Priced contract with bill of quantities.
- NEC Option C: Target contract with activity schedule.
- NEC Option D: Target contract with bill of quantities.
- NEC Option F: Management contract.
- NEC3.
- Prime cost contract.
- Term contract.
Featured articles and news
A UK training and membership provider for mould remediation professionals.
Building Safety recap April, 2026
A short and longer run-through of the month, with links to further information and sources.
CIAT May 2026 briefing.
Independent NSI and BAFE study exploring how organisations are changing the way they buy fire safety services.
From medieval scribes to modern word art.
ECA welcomes crackdown on late payment and push for clean energy, whilst CIOB seek fixed cladding removal timeframes.
Cyber Security in the Built Environment
Protecting projects, data, and digital assets: A CIOB Academy TIS.
Managing competence in the built environment
ITFG publishes new industry guide on how to meet the ICC principles.
The UK's campaign to reduce noise pollution: Mythbusting, articles and topic guides.
Setting Expectations on Competence Management
Industry Competence Committee.
New Scottish and Welsh governments
CIOB stresses importance of construction after new parliament elections.
The sad story of Derby Hippodrome
An historic building left to decay.
ECA, JIB and JTL back Fabian Society call to invest in skills for a stronger built environment workforce.
Women's Contributions to the Built Environment.
Calls for the delayed Circular Economy Strategy
Over 50 leading businesses, trade associations and professional bodies, including CIAT, and UKGBC sign open letter.
The future workforce: culture change and skill
Under the spotlight at UK Construction Week London.
A landmark moment for postmodern heritage.