BuiltIntelligence

NEC3 What I've learnt : a quick interview with Stephen Keach

Having started as a Trainee Quantity Surveyor at Sunley Turriff Construction Ltd, Stephen moved to Willmott Dixon Construction 23 years ago. Now Commercial Director, he has responsibility for all financial, contractual, legal and commercial matters and controls at the UK's leading independent construction and property services company.

How would others describe yourself in the 10 words?

It is always difficult to second guess what people might say but perhaps; Enthusiastic, assertive, energetic, impatient, competitive, stubborn, contentious, demanding, optimistic, independent.

How did you first get involved in NEC?

My first experience was when we tendered a local framework in 2004 under the NEC2. Despite having very limited experience of the NEC at this point we had to learn quickly! This Framework morphed into NEC3, then into NEC4 today and it’s still going strong. In this period, we have provided approximately 60 schemes for this customer with a turnover of £240m.

Willmott Dixon have consistently delivered around £130m per annum on NEC forms over the last few years, which equates to around 75% of our local construction office turnover. We predominantly undertake Option A schemes (as our Customers like the certainty of outturn costs), albeit we have experience in both option B and C.

Due to this large dependency we have gained invaluable experience within our teams and invested heavily in the training. We have a number of our Midlands staff using the Built Intelligence Academy to support their NEC interactions.

What do you like or even love about the NEC?

The clarity and simplicity – The contract is written in plain English and is easy to follow without the need for numerous cross referenced clauses, appendices or rafts of amendments.

Further positives that I see with the contract are;

  1. NEC promotes effective project management and collaboration – timely decision making, transparency and dispute avoidance / resolution.
  2. Early agreement of variations and the use of early warnings to foresee potential problems. This leads to reduced delay and certainty of delivery and ultimately, final accounts.
  3. Allocation and management of risk to suit which party is best placed to hold it.

What do you dislike most about NEC?

The hardest thing that I had to adhere to on an NEC projects was the adherence to the strict timescales surrounding communications, early warnings and compensation events, which is amplified by poor project management not complying with the strict NEC procedures. I would also have to say that it lacks some flexibility insofar as it assures that the design is fundamentally completed and doesn’t cater too well for pre-possession / commencement activities.

In terms of further issues, I would also mention the following;

  1. Often Z clauses are inserted, changing the nature of the contract (often to mirror the JCT provisions) and therefore contradict the arrangements the NEC was intended for.
  2. The administrative burden with ‘doing it right’ both from a contractors and project managers’ perspective and ensuring the correct processes and procedures (including timescales) are followed.
  3. The demanding (time related) programme requirements in relation to notifications, submissions and assessments.

What advice might you offer to an NEC newbie?

I have 27 years of experience from my first appointment as a Trainee Quantity Surveyor to my present position as Commercial Director. I have witnessed an extensive and varied workload within the industry and have experience of managing and understanding numerous forms of Contract. This work has ranged in value from £250,000 to £77,000,000 and has included all construction sectors (education, law and order, commercial, leisure, science and technology, residential, health, and retail), involving both new build and refurbishment projects.

When considering design, the NEC 3 does not make clear who is responsible for ensuring adequate integration and compatibility between each party’s designed portions or who is liable for ‘seam risk’ between Employer designed work and contractor designed work. So, unless suitable clarification is given in the Works Information, these risks are likely in practice to fall on the contractor.  Therefore - without secondary option X15 - the common law design standard applies i.e. “reasonably fit for its intended purpose”.

Based on the example above, the clarity of design liability within the Works Information is essential. Historically, the submission for design ranged from everything, to design elements only, down to virtually nothing. Early dialogue is critical to ensure the Employer clearly understands what design he needs to accept. 

What would you improve on your next NEC3 contract?

Looking at my biggest mistake, this is probably twofold – I would say assuming if the PM remains silent or misses a response time (i.e. submission of revised programme, design for acceptance, compensation event etc.) then the matter is deemed to be accepted. Also, the administration of supply chain strictly in accordance with the NEC form is sometimes lacking. Main contractors are often very good at NEC administration ‘up the line’, but revert back to more traditional (JCT type) techniques when dealing with their Supply Chain.

How do you respond to criticism of NEC3 and what suggestions do you have for NEC3?

The NEC is drafted to promote proactive, collaborative project management. Most of the problems and criticism arise as people simply do not follow the contract. It is written in plain English and is easy to follow – it just needs reading. Also people mention the ‘administrative burden’, but the projects should be resourced accordingly. There are also electronic tools to assist both project managers and contractors alike when dealing with communications.

The (frequent) introduction of a myriad of Z clauses frustrates and obscures the contracts original intent. Whilst this has been addressed to a degree by the introduction of the NEC4, it could be argued the new form could have gone even further to address these issues.

Thank you so much for your time Stephen: it is appreciated!

About the author:

Stephen Keach FRICS MCIOB BSc (Hons), Commercial Director at Willmott Dixon Construction Limited

https://www.willmottdixon.co.uk/ 

https://www.linkedin.com/in/stephen-keach-b4088b21/

 Stephen Keach


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