Last edited 01 Oct 2020

NEC Option C: Target contract with activity schedule

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.

Option C is a cost plus contract which is subject to a pain/gain share mechanism by reference to an agreed target cost built up from an activity schedule. It includes core and secondary option clauses, the schedules of cost components, and contract data

A target cost contract introduces a mechanism enabling the contractor, and/or the consultant team, to share in the benefits of cost savings, but also to bear some of the cost when there are cost overruns.

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