International Construction Law Review
IS NEC3 A REALISTIC ALTERNATIVE TO FIDIC FOR MAJOR INTERNATIONAL PROJECTS?
NICHOLAS DOWNING
AND
MIRANDA RAMPHUL AND TIM HEALEY1
Herbert Smith Freehills LLP, London
Introduction
This year celebrates the twentieth anniversary of the introduction of the New Engineering Contract2 in the United Kingdom (UK). Over this time, it has been through three revisions, the latest being the April 2013 Edition.3 The contracts have largely been used by the public sector4 in the UK for major or complex civil engineering projects, such as the Channel Tunnel Rail Link, East London Line and, most recently, the 2012 Olympic Games and Crossrail. Heathrow Airport Ltd used the contract in connection with the construction of Terminal 5 at Heathrow Airport, and has recently signed a NEC3-based contract for a new Terminal 2 building. NEC3 is also currently being used for the decommissioning of, as well as the development of new, nuclear reactors in the UK.5
The NEC website states that NEC3 is also intended for global application outside the UK, and lists the international projects where it has, to date, been used. To promote this, NEC has launched Users’ Groups in various jurisdictions to explain the contract’s philosophy towards the management of risk, which is based on a collaborative working approach, and to provide support to users and their consultants, supply chain and advisers.6 However, NEC3 is a newcomer in international markets, as compared to contracts produced by FIDIC,7 which are very well established and, we assume, will be familiar to readers.
1 Partner, Professional Support Consultant and Senior Associate, respectively.
2 First published in March 1993.
3 The contract has been rebranded the “Engineering and Construction Contract” but is commonly referred to as the “NEC3” contract.
4 The Construction Clients’ Board (formerly the Public Sector Clients’ Forum) endorses the contract and recommends that UK public sector organisations use it when procuring construction.
5 For further information on the background to the NEC3 contract, we refer to the following articles in previous issues of IICL: Martin Bridgewater and Andrew Hemsley, “NEC: A Change for the Better or a Missed Opportunity?” [2006] ICLR 39, and His Honour Humphrey LLoyd, QC, “Some Thoughts on NEC3” [2008] ICLR 468.
6 For more information on the international projects where the NEC3 contract has been used, and the Users’ Groups, visit http://www.neccontract.com/international/
7 The Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting Engineers). First published in 1999, the “rainbow” suite of FIDIC contracts have been modified significantly and refined over the years to take account of changing practices and legal developments, and are now widely used on a broad range of engineering and construction projects.
Pt 4] Is NEC3 a realistic alternative to FIDIC?
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