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Last edited 12 Jan 2021
NEC4 contract creates a procurement alliance arrangement for all stakeholders
|ICE’s collaborative NEC contract suite is the infrastructure procurement route of choice in the UK, Hong Kong, South Africa and New Zealand. In this article, Ian Heaphy introduces the latest member of the family, the NEC4 Alliance Contract.|
The contract marks the next stage in NEC’s 25-year history of collaborative construction procurement and creates a ‘true’ alliance arrangement, where the client and all key members of the supply chain are engaged under a single set of conditions of contract.
 NEC approach to alliancing
All contracts in the NEC4 contract suite, which was launched in 2017, and their predecessors are collaborative in nature. They allow all key members of the supply chain to be engaged under contracts that contain the requirement at clause 10.2 for the parties to, "act in a spirit of mutual trust and co-operation".
Further collaboration can be achieved using secondary option X12 multi-party collaboration, which incentivises multiple suppliers to collaborate to achieve a common set of objectives set by the promotor (commonly the client).
Members of the alliance are thus required to collaborate with each other to achieve alliance objectives and individual member objectives. They work collectively to support delivery of the contract and establish an integrated alliance delivery team on a best-for-project basis.
The alliance manager manages the contract on behalf of the alliance and undertakes many of the functions exercised by the project manager or service manager under other NEC contracts, as well as some aspects of the contractor’s role.
Alliance members share the majority of risk under the contract and agree that there can be no claims made against other members of the alliance except for very limited exceptions, principally due to a deliberate breach of contact.
 Performance table
All partners are incentivised to achieve alliance objectives through a performance table, which sets out what performance is required and the reward or deduction regimes that apply if the performance targets are over- or under-achieved.
This article is based on the author’s briefing article in the latest issue of the ICE Civil Engineering journal and originally appeared at: https://www.ice.org.uk/news-and-insight/the-civil-engineer/november-2018/new-nec4-contract-creates-true-alliance
 Related articles on Designing Buildings Wiki
- ICE articles on Designing Buildings Wiki.
- ICE Conditions of Contract.
- NEC contract change management systems.
- NEC contracts and collaborative working.
- NEC4 - legal and insurance aspects.
- NEC4 Alliance contract.
- NEC4 Design, Build and Operate Contract.
- Procurement route.
- Project 13.
- The Institution of Civil Engineers.
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