NEC contract change management systems

[edit] New Engineering Contract (NEC, NEC3) change management systems

Many different contracts can be used to guide and protect the day-to-day working relationships of organisations on engineering and construction projects and facilities management (FM) engagements. A large project or programme may involve 100's of separate contracts covering upstream and downstream relationships.

The New Engineering Contract (NEC), and NEC3 (third edition) in particular, is now recommended by the National Audit Office, endorsed by the Office of Government Commerce, required on NHS Procure21 projects and on schemes for the 2012 Olympic Games. It has become increasingly widely used on UK construction projects. However, it challenges teams to meet strict time constraints for agreeing changes under the contract, and such change management may need to be shared with authorised participants across a multi-company, multi-disciplinary, geographically dispersed project team.

Electronic change management systems can help with this process.

[edit] New Engineering Contract (NEC): background

The first edition of the New Engineering Contract (NEC; also known sometimes as the Engineering and Construction Contract, ECC) was published in 1993, with the second edition following in 1995, and a third (NEC3) in May 2005.

Since the mid-1990s, partly stimulated by the drive towards more collaborative approaches to working following the 1994 Latham Report (Constructing the Team), the NEC has been widely employed on UK construction projects. It appeals particularly to clients and their project teams wanting to adopt a non-confrontational approach, with heavy emphasis on ongoing and effective management of change, to avoid claims and disputes.

The contract has been recommended by the National Audit Office (Improving Public Services through Better Construction, March 2005) and endorsed by the Office of Government Commerce (OGC now absorbed into the Efficiency and Reform Group (ERG) within the Cabinet Office). Many contracts for major projects and programmes are now therefore procured using the NEC.

NB See NEC3 for more information

[edit] NEC change challenges

The NEC imposes high levels of management discipline on the client, project managers, designers and contractors. For example, clauses relating to compensation events (events that might allow claims for loss and expense, and extensions of time - referred to as relevant events on some other forms of contract), subject contractors to time constraints governing when they must issue notifications to the client, while responses are also subject to specific time limits.

Such change management processes, if employed on projects using conventional paper-based communications, can generate large volumes of paperwork and absorb considerable amounts of management time – particularly if it is difficult to associate processes (eg: an early warning notice) with particular items of works information (eg: drawings).

[edit] Electronic change management

Workflow is defined as: “The automation of a business process, in whole or part, during which documents, information or tasks are passed from one participant to another for action, according to a set of procedural rules.”

Web-based collaboration platforms are increasingly widely used to manage drawings, documents and other types of file quickly, easily and securely by authorised members of the project team. There are two NEC-approved platforms (Conject is one of these), as well as rival Saas's (Software-as-a-Service systems - that is software that is accessed online), and most work in broadly similar ways.

The platforms are configured to electronically manage common industry processes such as; transmittals, requests for information (RFIs), instructions, change orders, and so on, that used to be undertaken using paper-based forms. These processes have now been extended to cover NEC workflows that, when applied in a logical sequence, help teams to follow the correct process procedures and make use of NEC contracts easier.

They can help clients, their contractors and consultants manage change using forms, terminology and timescales that are consistent, efficient, flexible and familiar. The technology also supports different variations of the contract, including the NEC engineering and construction contract (ECC), the engineering and construction short contract (ECSC), the term service contract (TSC), the framework contract (FC), the engineering and construction sub-contract (ECS) and bespoke versions of the contract specific to particular organisations.

Software can include business intelligence functionality which provides real-time reporting on the status and consequence of change from a package, project or programme perspective.

Systems also provide a powerful tool to manage the quality of information - the initial quality of ‘works information’ is a strong determinant of the number of early warning notices needed. Seamless integration between drawing management and the NEC workflows allows a user to raise an early warning notice from within the works information – saving time and putting the notice exactly into context. Software can include glossaries, workflow diagrams and flow charts which can help the software users to improve their understanding of NEC activities.

[edit] Summary of potential benefits.

Potential benefits of electronic NEC change management include:

• Improved compliance against contractual obligations.
• Reduced paperwork - leading to significant management time savings.
• A more consistent interface make referencing the contract easier.
• Ensuring full and complete information is provided when using the contract.
• Better real-time management and control of information flows.
• Improved integration of processes and project data.
• Greater transparency and real-time cross-project visibility to process participants.
• More complete reporting and performance data.
• Providing a single source of reference for all NEC data.
• Full audit trail of all contract-related communications.
• Notifications should emergency situations occur.

This article was created by --MichaeBull 18:25, 3 May 2013 (BST)

[edit] Related articles on Designing Buildings Wiki

• Construction contracts.
• Compensation event.
• Core clause.
• Defined cost.
• Delay damages.
• Disallowed cost.
• Key dates.
• Latham Report.
• NEC3.
• OGC.
• Period for reply.
• Z clauses.