02 April 2019

NEC4: Key January 2019 amendments explained

The NEC4 suite of contracts was introduced two years ago and we are now starting to see them being used. In the meantime, some amendments called the “January 2019 amendments” have recently been issued.

The NEC has published a list of the amendments with explanations. Some are simply corrected typos, with a handful being more significant changes.

Whilst there are no major amendments, we have provided a useful summary of the six main changes below:

  1. Assessing Compensation Events (“CEs”)
    The third paragraph of clause 63.5 has been replaced with:

    “The assessment takes into account

    • any delay caused by the compensation event already in the Accepted Programme and
    • events which have happened between the date of the Accepted Programme and the dividing date.”

    The aim is to support a practice note issued in October 2017 explaining that events between the date of the Accepted Programme and the dividing date for the CE (such as other CEs, CEs already in the Accepted Programme or other causes of delay) should be taken into account when assessing the CE.

  2. ECC Clause 90.2 - Termination Table

    The procedures relating to termination by the Client for reasons R17 (released under law) and R20 (start work or de-scope has not been given in 13 weeks) are now in line with those where the Contractor terminates for those reasons.

  3. Agreement of Defined Cost (Options C, D, E and F clause 50.9)

    These amendments make clear that the finalisation of Defined Cost relates to part of the works.

  4. Senior Representatives (Options W1 and W2)

    The amendments simply allow one party to unilaterally replace its appointed Senior Representative (in the Contract Data) following notification to the other party.

  5. Certificate of Insurance (X15.6)

    The Contractor must provide the Project Manager with its PII certificate before the start date and also on each renewal until the end of the period stated in the Contract Data. Contractors should consider how long this period should be when negotiating the contract terms.

  6. Professional Services Short Contract - People Rates

    The Contract Data has been amended so that the Client must choose between paying on a time charge basis or a rates and lump sum basis. It cannot choose a mix of both.

Sarah Wilson is head of Shulmans' Construction team advising developers, contractors and consultants on large scale projects in relation to both contentious and non-contentious matters. For proactive, expert advice on contracts or other construction issues, contact Sarah on +44 (0)113 831 3925 or email sawilson@shulmans.co.uk.