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
Tackle the decline in Welsh electrical apprenticeships
ECA calls on political parties 100 days to the Senedd elections.
Resident engagement as the key to successful retrofits
Retrofit is about people, not just buildings, from early starts to beyond handover.
What they are, how they work and why they are popular in many countries.
Plastic, recycling and its symbol
Student competition winning, M.C.Esher inspired Möbius strip design symbolising continuity within a finite entity.
Do you take the lead in a circular construction economy?
Help us develop and expand this wiki as a resource for academia and industry alike.
Warm Homes Plan Workforce Taskforce
Risks of undermining UK’s energy transition due to lack of electrotechnical industry representation, says ECA.
Cost Optimal Domestic Electrification CODE
Modelling retrofits only on costs that directly impact the consumer: upfront cost of equipment, energy costs and maintenance costs.
The Warm Homes Plan details released
What's new and what is not, with industry reactions.
Could AI and VR cause an increase the value of heritage?
The Orange book: 2026 Amendment 4 to BS 7671:2018
ECA welcomes IET and BSI content sign off.
How neural technologies could transform the design future
Enhancing legacy parametric engines, offering novel ways to explore solutions and generate geometry.
Key AI related terms to be aware of
With explanations from the UK government and other bodies.
From QS to further education teacher
Applying real world skills with the next generation.
A guide on how children can use LEGO to mirror real engineering processes.
Data infrastructure for next-generation materials science
Research Data Express to automate data processing and create AI-ready datasets for materials research.
Wired for the Future with ECA; powering skills and progress
ECA South Wales Business Day 2025, a day to remember.
AI for the conservation professional
A level of sophistication previously reserved for science fiction.