Last edited 23 Aug 2018

NEC Option B: Priced contract with bill of quantities

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 contractor and client.

The Engineering and Construction Contract (ECC) is the most frequently used, and can be adopted on projects such as infrastructure, buildings, highways and process plants. It is used for the appointment of a contractor for engineering and construction work, including any level of design responsibility.

Under Option B, the bill of quantities is a ‘traditional’ bill of quantities, i.e. a document prepared by the cost consultant (often a quantity surveyor) that provides project specific measured quantities of the items of work identified by the drawings and specifications in the tender documentation.

From the employer’s specified quantities the contractor prices its rates accordingly, and bears the risk of carrying out the work at the agreed prices.

The contractor is entitled to interim payments, certified at assessment dates by the project manager as set out in the contract. The price for the work done to date is the quantity of completed work for each BoQ item multiplied by the relevant rate and a proportion of any lump sum item in the BoQ. The proportion of the lump sum items to be paid is determined by the extent to which they have been completed.

The contract contains core and secondary option clauses, the shorter schedule of cost components, and contract data.