International Construction Law Review
CORRESPONDENT’S REPORT – UNITED KINGDOM
NICHOLAS DOWNING AND JAMES DOE
Partner, Herbert Smith Freehills LLP
SUSANNAH DAVIS AND NOE MINAMIKATA
Professional support lawyer, Herbert Smith Freehills LLP
NEC4 ALLIANCE CONTRACT
NEC published the first edition of its Alliance Contract (ALC) in June 2018 as part of the NEC4 suite. The Contract takes account of feedback received on a consultative version published in July 2017. NEC has developed the ALC for use on major projects or programmes, or to procure multiple smaller projects grouped together as a programme. The ALC is intended to take positive collaboration between project participants (a central objective of NEC) to a more advanced level than is possible by a client contracting bilaterally under a series of NEC contracts.
The ALC is a multiparty contract, for use where the alliance is formed of the client and two or more partners. The members of the alliance are required to:
- • work collectively to support the delivery of the Contract on a best-for-project basis; and
- • establish an integrated alliance delivery team to achieve this aim.
The ALC’s risk allocation, contract management processes and incentive provisions are designed to support these aims, creating a “true” alliance in which members prosper (or fail) together through collaborating to achieve common objectives. For example:
- • The alliance’s strategy is set by an alliance board, on which each member of the alliance has a representative;
- • Nearly all decisions of the alliance board are to be taken unanimously; and
- • Alliance members are subject to a common incentive regime.
The ALC seeks to promote resolution of all issues through the alliance itself; alliance members have no legally enforceable rights against one another for breach of contract, except in very limited circumstances.
In other respects, the ALC closely resembles other NEC contracts. In particular, its approach to timely and clear communications and
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