Student NEC dissertation

Dear all,

Another 5 mins of your time please for this student's research. In his own words....

I am presently completing a MSc in Construction Law and Dispute Resolution and would appreciate if you and any of your colleagues with experience of the ECC C would complete my survey.

 

The questionnaire aims to capture the opinions of construction professional experienced within the use of the ECC Option C form of contract and the research seeks to establish ‘if in administering disallowed costs under ECC Option C, the Project Manager is in danger of breaching the required spirit of mutual trust and co-operation’.

 

The survey will only take 5 minutes to complete and all  responses provided will be combined and analysed collectively to ensure no one contribution is identifiable, therefore ensuring the anonymity of the participant and their organisation

 

Many thanks for your assistance and time.

 

https://www.surveymonkey.com/s/MScNECSurvey

 

 

 

Should the Fee be fixed in ECC target cost contracts?

A question from a client at the recent NEC Users' Group annual Seminar related to the thoughts of changing the variable Fee approach with target cost contracts. These are his further thoughts, a Newsletter article is likely but some opinion in the meantime would be very helpful.....

ECC target cost contracts (main Options C and D) provide a mechanism for charging Fee based on the tendered fee percentage x the cost (Defined Cost). This is a variable Fee approach.

A number of alternative approaches are being adopted by clients to either fix the Fee amount regardless of costs incurred (a lump sum Fee), or to “invert” the fee calculation to base the Fee on the target (Prices) rather than the Defined Cost. In doing so, this is thought to provide benefits of a “double incentive” to the Contractor to optimise or dilute Fee when costs are below or above target, to give the client better cost certainty of the amounts paid in respect of Fee sums, and not to “reward” the Contractor by way of additional fee recovery when costs exceed the target.

Comments, thoughts and soundings on these alternative approaches are welcomed. Are these alternative approaches commonplace throughout the  industry, are they seen as fair and equitable, are there any unintended consequences?

Rob

Achieving cost certainty with NEC

A few times now I have heard people suggest that cost certainty is more likely achieved by using NEC3 ECC Option A than any of the other Options. Interesting. All Option A is at the end of the day is a pricing mechanism, this one happens to be lump sum. In the highly unlikely event that no compensation events arise, the lump sum agreed is that which is paid so I suppose cost certainty has been achieved. Whether this is a lower price paid than would have been obtained using Option C is debatable however my point is these are just finer points and surely the best way for clients to achieve 'cost certainty' is to act intelligently by having a good, clear scope of works with little change thereafter (ie know what you want); sensibly avoid, reduce or mitigate as much project risk as you can; sensibly allocate the residual risk left over (of course ensuring the contract matches this); surround yourself with sensible people; make sure the 'price' is realistic; and then press the go button......

So which do you think is likely to achieve cost certainty
1. Option A?
2. Option C?
3. The intelligent client?

Rob