NEC3 (2005) - Searchable

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Engineering a n d Construction Contract
This contract should be used for the appointment of a contractor for
engineering and construction work, including any level of
design responsibility
An NEC document
June 2005
OGC endorsement of NEC3
OGG advises public sector procurers that the form of contract used has to be selected
according to the objectives of the project, aiming to satisfy the
Achieving Excellence in Construction (AEC) principles.
This edition of the NEC (NEC3) complies fully with the AEC principles. OGG recommends
the use of NEC3 by public sector construction procurers on their construction projects.
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The NEC Users' Group is an essential support BOOKS
serv ice for all users of the N E C . It provides contact A comprehensive range of books and g u e s wrtten
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I ' 1 C A L .
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NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary of

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the Institution of Civil Engineers ( I C E ) , the owner and developer of the NEC.
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The NEC is a family of standard contracts, each of which has these
characteristics:
• Its use stimulates good management of the relationship between the two
parties to the contract and, hence, of the work included in the contract
• It can be used in a wide variety of commercial situations, for a wide
variety of types of work and in any location.
• It is a clear and simple document - using language and a structure
which are straightforward and easily understood.
NEC3 Engineering and Construction Contract is one of the NEC family and is
consistent with all other NEC3 documents. Also available are the Engineering
and Construction Contract Guidance Notes, Flow Charts and Options A, B, C,
D, E and F. I
ISBN (complete box set) 0 7 2 77 3382 6
ISBN (this document) 0 7277 3359 1 I
ISBN (Engineering and Construction Contract Guidance Notes) 0 7 2 77 3366 4
ISBN (Engineering and Construction Contract Flow Charts) 0 7 2 7 7 3367 2
ISBN (Option A: Priced contract with activity schedule) 0 7 2 77 3360 5
ISBN (Option B: Priced contract with bill of quantities) 0 7277 3361 3 I

ISBN (Option C: Target contract with activity schedule) 0 7 2 7 7 3362 1
ISBN (Option D: Target contract with bill of quantities) 0 7 2 77 3363 X

I
ISBN (Option E: Cost reimbursable contract) 0 7 2 7 7 3364 8
ISBN (Option F: Management contract) 0 7 2 7 7 3365 6 t
Consultative edition 1 9 9 1
First edition 1993
Second edition 1 9 9 5
Reprinted November 1 9 9 5 with amendments
Reprinted with corrections May 1 9 9 8

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Third edition June 2 0 0 5 E
J
Cover photo, Golden Jubilee Bridge, courtesy of City of Westminster a
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9 8 7 6 5 4 3 2 '
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British Library Cataloguing in Publication Data for this publication is available
from the British Library.
€ Copyright nec 2005 I
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%
All rights, including translation, reserved, The owner of this document may
reproduce the Contract Data for the purpose of obtaining tenders, awarding I
and administering contracts. Except as permitted by the Copyright, Designs
and Patents Act 1988, no part of this publication may be otherwise I

reproduced, stored in a retrieval system or transmitted in any form or by any
I
!
means, electronic, mechanical, photocopying, recording or otherwise. without
the prior written permission of the NEC Director, NEC, Thomas Telford Ltd, ,
1 Heron Quay, London E14 4JD.
Typeset by Academic + Technical, Bristol I
Printed and bound in Great Britain by Bell & Bain Limited, Glasgow, UK I
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CONTENTS
Acknowledgements iv
Schedule of Options 1
Core clauses 1 General 3
2 The Contractor's main responsibilities 7
3 Time 9
4 Testing and Defects 11
5 Payment 13
6 Compensation events 15
7 Title 20
8 Risks and insurance 21
9 Termination 24
Main Option clauses A Priced contract with activity schedule 27
B Priced contract with bill of quantities 29
C Target contract with activity schedule 31
D Target contract with bill of quantities 34
E Cost reimbursable contract 38
F Management contract 40
Dispute resolution w Option W1 42
Option W2 45
Secondary Option clauses X1 Price adjustment for inflation 48
X2 Changes in the law 49
X3 Multiple currencies 49
X4 Parent company guarantee 49
X5 Sectional Completion 49
X6 Bonus for early Completion 50
X7 Delay damages 50
X12 Partnering 50
X13 Performance bond 52
X14 Advanced payment to the Contractor 52
X15 Limitation of the Contractor's liability for his design to reasonable 52
skill and care
X16 Retention 53
X17 Low performance damages 53
X18 Limitation of liability 53
X20 Key Performance Indicators 54
Y(UK)2 The Housing Grants, Construction and Regeneration Act 1 9 9 6 55
Y(UK)3 The Contracts (Rights of Third Parties) Act 1 9 9 9 55
z Additional conditions of contract 55
Note Options XS to X 1 1 , X 1 9 and Y(UK)l are not used
Schedule of Cost 56
Components
Shorter Schedule of Cost 59
Components
Contract Data 61
Index 74
ACKNOWLEDGEMENTS
The NEC first edition was produced by the Institution of Civil Engineers
through its NEC Working Group.
The original NEC was designed and drafted by Dr Martin Barnes then of
Coopers and Lybrand with the assistance of Professor J. G. Perry then of the
University of Birmingham, T. W. Weddell then of Travers Morgan Management,
T, H. Nicholson, Consultant to the Institution of Civil Engineers, A. Norman
then of the University of Manchester Institute of Science and Technology and
P. A. Baird, then Corporate Contracts Consultant, Eskom, South Africa.
The second edition of the NEC documents for engineering and construction
contracts was produced by the Institution of Civil Engineers through its NEC
Panel.
The third edition of the NEC Engineering and Construction Contract was
produced by the Institution of Civil Engineers through its NEC Panel. The
Flow Charts were produced by John S. Gillespie with assistance from Tom
Nicholson.
The members of the NEC Panel are:
P. H iggins, BSc, CEng, FICE, FCIArb (Chairman)
P.A. B a i rd , B Sc, CEng, F ICE, M ( SA ) ICE, MAPM
M. B arnes, B Sc ( Eng ) , PhD, FREng. FICE, FCIOB, CCM I , ACIArb, MBCS,
FInstCES, FAPM
A . J. Bates, FRIGS, MlnstCES
A. J . M . B lackler, BA , LL B ( Cantab ) , MCIArb
P. T. Cousins, B Eng ( Tech ), DipArb, CEng, MICE, MCIArb, MCMI
L. T. Eames, BSc, FRICS, FCIOB
F. Forward, BA( Hons), D ipArch, MSc(Const Law), RIBA, F CIArb
Professor J. G . Perry, MEng, PhD, CEng, FICE, M APM
N. C. Shaw, FCIPS, CEng, MIMechE
T. W. Weddell, BSc, CEng, DIC, F ICE, FIStructE, A CIArb
NEC Consultant:
R . A. Gerrard, BSc(Hons), MRICS, FCIArb, F lnstCES
Secretariat:
A. Cole, LLB, LLM, BL
J. M. Hawkins, BA( Hons ) , MSc
F. N. Vernon (Technical Adviser), BSc, CEng, MICE
The Institution of Civil Engineers acknowledges the help in preparing the third
edition given by many other people, in particular, by:
J. C. Broome, BEng
A. Else, B Sc, CEng, FICE
C. F look, Esq.
R. L ewendon, FICE, MIHT, MCIArb, MAPM
T. H. Nicholson, BSc, FICE
R. Patterson, BA, M A ( Cantab ) , MBA, CEng, MICE
C. Reed, CEng, MA, MSc, FICE
D. Weeks, FRI CS
S. Zarka, FRICS
SCHEDULE OF OPTIONS
The strategy for choosing the form of contract starts with a decision between
six main Options, one of which must be chosen.
Option A Priced contract with activity schedule
Option B Priced contract with bill of quantities
Option C Target contract with activity schedule
Option D Target contract with bill of quantities
Option E Cost reimbursable contract
Option F Management contract
One of the following dispute resolution Options must be selected to complete
the chosen main Option.
Option W1 Dispute resolution procedure (used unless the United Kingdom Housing
Grants, Construction and Regeneration Act 1996 applies).
Option W2 Dispute resolution procedure (used in the United Kingdom when the Housing
Grants, Construction and Regeneration Act 1996 applies).
The following secondary Options should then be considered. It is not necessary
to use any of them. Any combination other than those stated may be used.
Option X1 Price adjustment for inflation (used only with Options A, B, C and D)
Option X2 Changes in the law
Option X3 Multiple currencies (used only with Options A and B)
Option X4 Parent company guarantee
Option X5 Sectional Completion
Option X6 Bonus for early Completion
Option X7 Delay damages
Option X12 Partnering
Option X13 Performance bond
Option X14 Advanced payment to the Contractor
Option X15 Limitation of the Contractor's liability for his design to reasonable skill and
care
Option X16 Retention ( not used with Option F)
Option X17 Low performance damages
Option X18 limitation of liability
Option X2O Key Performance Indicators (not used with Option X 1 2 )
The following Options dealing with national legislation should be included if
required.
Option Y( UK) 2 The Housing Grants, Construction and Regeneration Act 1 9 9 6
Option Y(UK)3 The Contracts (Rights of Third Parties) Act 1 9 9 9
Option Z Additional conditions of contract
Note Options XS to X 1 1 , X 1 9 and Y(UK)1 are not used.
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.5pl&C 3 Engineering and Construction Contract
CORE CLAUSES
1 General
Actions 10
10.1 The Employer, the Contractor, the Project Manager and the Supervisor shall
act as stated in this contract and in a spirit of mutual trust and co-operation.
Identified and defined 11
terms 11.1 In these conditions of contract, terms identified in the Contract Data are in
italics and defined terms have capital initials.
11.2 (1) The Accepted Programme is the programme identified in the Contract
Data or is the latest programme accepted by the Project Manager. The latest
programme accepted by the Project Manager supersedes previous Accepted
Programmes.
( 2 ) Completion is when the Contractor has
• done all the work which the Works Information states he is to do by the
Completion Date and
• corrected notified Defects which would have prevented the Employer from
using the works and Others from doing their work.
If the work which the Contractor is to do by the Completion Date is not stated
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in the Works Information, Completion is when the Contractor has done all the •
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work necessary for the Employer to use the works and for Others to do their • Q
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(3) The Completion Date is the completion date unless later changed in 0
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accordance with this contract.
( 4) The Contract Date is the date when this contract came into existence.
( 5 ) A Defect is
• a part of the works which is not in accordance with the Works Information
or
• a part of the works designed by the Contractor which is not in accordance
with the applicable law or the Contractor's design which the Project
Manager has accepted.
( 6) The Defects Certificate is either a list of Defects that the Supervisor has
notified before the defects date which the Contractor has not corrected or, if
there are no such Defects, a statement that there are none.
(7) Equipment is items provided by the Contractor and used by him to Provide
the Works and which the Works Information does not require him to include in
the works.
(8) The Fee is the sum of the amounts calculated by applying the subcon
tracted fee percentage to the Defined Cost of subcontracted work and the
direct fee percentage to the Defined Cost of other work.
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jeC3 sngneenng an construction contract
(9) A Key Date is the date by which work is to meet the Condition stated. The
Key Date is the key date stated in the Contract Data and the Condition is the
condition stated in the Contract Data unless later changed in accordance with
this contract.
(10) Others are people or organisations who are not the Employer, the Project
Manager, the Supervisor, the Adjudicator, the Contractor or any employee,
Subcontractor or supplier of the Contractor.
( 1 1 ) The Parties are the Employer and the Contractor.
( 12) Plant and Materials are items intended to be included in the works.
(13) To Provide the Works means to do the work necessary to complete the
works in accordance with this contract and all incidental work, services and
actions which this contract requires.
(14) The Risk Register is a register of the risks which are listed in the
Contract Data and the risks which the Project Manager or the Contractor has
notified as an early warning matter. It includes a description of the risk and a
description of the actions which are to be taken to avoid or reduce the risk.
(15) The Site is the area within the boundaries of the site and the volumes
above and below it which are affected by work included in this contract.
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$ (16) Site Information is information w hich
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• is in the documents which the Contract Data states it is i n .
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Contractor to
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8 • provide a service necessary to Provide the Works or
o • s uppl y Pl ant and Materials which the person or organisation has wholly
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5 ( 1 8 ) The Working Areas are those parts of the working areas which are
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• used only for work in this contract
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( 19) Works Information is information which either
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• states any constraints on how the Contractor Provides the Works
and is either
• in the documents which the Contract Data states it is in or
• in an instruction given in accordance with this contract.
Interpretation and the law 12
12.1 In this contract, except where the context shows otherwise, words in the
singular also mean in the plural and the other way round and words in the
m asculine also mean in the feminine and neuter.
12.2 This contract is governed by the law of the contract.
12.3 No change to this contract, unless provided for by the conditions of contract,
has effect unless it has been agreed, confirmed in writing and signed by the
Parties.
12.4 This contract is the entire agreement between the Parties.
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core causes eneC 3
Communications 13
13.1 Each instruction, certificate, submission. proposal, record. acceptance,
notification, reply and other communication which this contract requires is
communicated in a form which can be read, copied and recorded. Writing is in
the language of this contract.
13.2 A communication has effect when it is received at the last address notified by
the recipient for receiving communications or, if none is notified, at the
address of the recipient stated in the Contract Data.
13.3 If this contract requires the Project Manager, the Supervisor or the Contractor
to reply to a communication, unless otherwise stated in this contract. he
replies within the period for reply.
13.4 The Project Manager replies to a communication submitted or resubmitted to
him by the Contractor for acceptance. If his reply is not acceptance. the
Project Manager states his reasons and the Contractor resubmits the commu
nication within the period for reply taking account of these reasons. A reason
for withholding acceptance is that more information is needed in order to
assess the Contractor's submission fully.
13.5 The Project Manager may extend the period for reply to a communication if the
Project Manager and the Contractor agree to the extension before the reply is
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due. The Project Manager notifies the Contractor of the extension which has Cl>
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13.6 The Project Manager issues his certificates to the Employer and the Contrac « c
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tor. The Supervisor issues his certificates to the Project Manager and the 0
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13.7 A notification which this contract requires is communicated separately from
other communications.
13.8 The Project Manager may withhold acceptance of a submission by the
Contractor. Withholding acceptance for a reason stated in this contract is not
a compensation event.
The Project Manager and 14
the Supervisor 14.1 The Project Manager's or the Supervisor's acceptance of a communication
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from the Contractor or of his work does not change the Contractor's responsi
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bility to Provide the Works or his liability for his design. %.
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14.2 The Project Manager and the Supervisor, after notifying the Contractor, may
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delegate any of their actions and may cancel any delegation. A reference to 0
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an action of the Project Manager or the Supervisor in this contract includes an
action by his delegate.
14.3 The Project Manager may give an instruction to the Contractor which changes
the Works Information or a Key Date.
14.4 The Employer may replace the Project Manager or the Supervisor after he has
notified the Contractor of the name of the replacement.
Adding to the Working 15
Areas 15.1 The Contractor may submit a proposal for adding an area to the Working
Areas to the Project Manager for acceptance. A reason for not accepting is
that the proposed area is either not necessary for Providing the Works or used
for work not in this contract.
Early warning 16
16.1 The Contractor and the Project Manager give an early warning by notifying the
other as soon as either becomes aware of any matter which could
• increase the total of the Prices.
• delay Completion,
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• impair the performance of the works in use.
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neC 3 sgneenng ana construction contract
The Contractor may give an early waring by notifying the Project Manager of
any other matter which could increase his total cost. The Project Manager
enters early warning matters in the Risk Register. Early warning of a matter
for which a compensation event has previously been notified is not required.
16.2 Either the Project Manager or the Contractor may instruct the other to attend a
risk reduction meeting. Each may instruct other people to attend if the other
agrees.
16.3 At a risk reduction meeting, those who attend co-operate in
• making and considering proposals for how the effect of the registered
risks can be avoided or reduced,
• seeking solutions that will bring advantage to all those who will be
affected,
• deciding on the actions which will be taken and who, in accordance with
this contract, will take them and
• deciding which risks have now been avoided or have passed and can be
removed from the Risk Register.
16.4 The Project Manager revises the Risk Register to record the decisions made at
each risk reduction meeting and issues the revised Risk Register to the
Contractor. f a decision needs a change to the Works Information, the Project

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Manager instructs the change at the same time as he issues the revised Risk
Register.
Ambiguities and 17
inconsistencies 17.1 The Project Manager or the Contractor notifies the other as soon as either
becomes aware of an ambiguity or inconsistency in or between the documents
which are part of this contract. The Project Manager gives an instruction
resolving the ambiguity or inconsistency.
Illegal and impossible 18
requirements 18.1 The Contractor notifies the Project Manager as soon as he considers that the
Works Information requires him to do anything which is illegal or impossible.
If the Project Manager agrees, he gives an instruction to change the Works
Information appropriately.
£ Prevention 19
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• stops the Contractor completing the works or
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o • stops the Contractor completing the works by the date shown on the
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A ccepted P rogramme,
and which
• neither Party could prevent and
• an experienced contractor would have udged

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have such a small chance of occurring that it would have been unreason
able for him to have allowed for it,
the oject Manager gives an instruction to the Contractor stating how he is to

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deal with the event.
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co causes ·nec3
2 The Contractor's main responsibilities
Providing the Works 20
20.1 The Contractor Provides the Works in accordance with the Works Information.
The Contractor's design 21
21.1 The Contractor designs the parts of the works which the Works Information
states he is to design.
21.2 The Contractor submits the particulars of his design as the Works Information
requires to the Project Manager for acceptance. A reason for not accepting
the Contractor's design is that it does not comply with either the Works
Information or the applicable law.
The Contractor does not proceed with the relevant work until the Project
Manager has accepted his design.
21.3 The Contractor may submit his design for acceptance in parts if the design of
each part can be assessed fully.
Using the Contractor's 22
design 22.1 The Employer may use and copy the Contractor's design for any purpose
connected with construction, use, alteration or demolition of the works unless
otherwise stated in the Works Information and for other purposes as stated in
the Works Information.
Design of Equipment 23
23.1 £
The Contractor submits particulars of the design of an item of Equipment to
the Project Manager for acceptance if the Project Manager instructs him to, A
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reason for not accepting is that the design of the item will not allow the Con c c
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tractor to Provide the Works in accordance with £ 6
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• the Contractor's design which the Project Manager has accepted or
• the applicable law.

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People 24
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24.1 The Contractor either employs each key person named to do the job stated in 8 =
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the Contract Data or employs a replacement person who has been accepted
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by the Project Manager. The Contractor submits the name, relevant qualifica
tions and experience of a proposed replacement person to the Project
Manager for acceptance. A reason for not accepting the person is that his
relevant qualifications and experience are not as good as those of the person
who is to be replaced.
24.2 The Project Manager may, having stated his reasons, instruct the Contractor
to remove an employee. The Contractor then arranges that, after one day, the
employee has no further connection with the work included in this contract.
Working with the Employer 25
and Others 25.1 The Contractor co-operates with Others in obtaining and providing information
which they need in connection with the works. He co-operates with Others and
shares the Working Areas with them as stated in the Works Information.
25.2 The Employer and the Contractor provide services and other things as stated
in the Works Information. Any cost incurred by the Employer as a result of the
Contractor-not providing the services and other things which he is to provide is
assessed by the Project Manager and paid by the Contractor.

neC3 sngneenng an construction contract
25.3 If the Project Manager decides that the work does not meet the Condition
stated for a Key Date by the date stated and. as a result, the Employer incurs
additional cost either
• in carrying out work or
• by paying an additional amount to Others in carrying out work
on the same project. the additional cost which the Employer has paid or will
incur is paid by the Contractor. The Project Manager assesses the additional
cost within four weeks of the date when the Condition for the Key Date is met.
The Employer's right to recover the additional cost is his only right in t hese
circumstances.
Subcontracting 26
26.1 If the Contractor subcontracts work , he is res ponsible for Pro viding the Works
a s if he had not subcontracted . This contract a pplies as if a Subcontractor's
e mployees and e quipment were the Contractor's.
26.2 Th e Contractor subm ts i the name of each proposed Subcontractor to the
Project Manager for acceptance. A reason for not accepting the Subcontractor
is that hi s a ppointment wi ll not a llow the Contractor to Provide the Works. The
Contractor does not a pp o i n t a proposed Subcontractor unt li the Project
Manager has accepted him.

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:::, 26.3 Th e Contractor submits the proposed conditions of contract for each subcon
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The Contractor do es not a pp oint a Subcontractor on t he proposed subcontract

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0 condition s submi tted until the Project Manager has ac cepted th em. A reason
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for not acce pting them is that
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• they w ill not a llow the Contractor to Provide t he Works or
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) . • th ey do not inc lude a statement th at the pa rties to the subcontract shall
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Other responsibilities 27
27.1 The Contractor pproval gn rom Others where necessary.

£ obtains a of his desi f
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5 £ 27.2 The Contractor provides access to work b ein g done a nd to Plant and Materials
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• the Project Manager,
" • the Supervisor and
• Others notified to him by the Project Manager.
27.3 The Contractor o beys an instruction wh ich is in a ccordance with this contract
and is given to him by the Project Manager or the Supervisor.
2 7 .4 The Contractor ac ts in accordance with the health and sa fety requirements
stated in the Works I nformation .
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core causes "neC3
3 Time
Starting, Completion and 30
Key Dates 30.1 The Contractor does not start work on the Site until the first access date and
does the work so that Completion is on or before the Completion Date.
30.2 The Project Manager decides the date of Completion. The Project Manager
certifies Completion within one week of Completion.
30.3 The Contractor does the work so that the Condition stated for each Key Date
is met by the Key Date.
The programme 31
31.1 If a programme is not identified in the Contract Data, the Contractor submits
a first programme to the Project Manager for acceptance within the period
stated in the Contract Data.
31.2 The Contractor shows on each programme which he submits for acceptance
• the starting date, access dates, Key Dates and Completion Date,
• planned Completion, "'

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• the order and timing of the operations which the Contractor plans to do 2
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i • for each operation, a statement of how the Contractor plans to do the
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show on a programme submitted for acceptance.
31.3 Within two weeks of the Contractor submitting a programme to him for
acceptance, the Project Manager either accepts the programme or notifies the
Contractor of his reasons for not accepting it. A reason for not accepting a
programme is that
• the Contractor's plans which it shows are not practicable,
• it does not show the information which this contract requires,
• it does not represent the Contractor's plans realistically or
• it does not comply with the Works Information.
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Revising the programme 32
32.1 The Contractor shows on each revised programme
• the actual progress achieved on each operation and its effect upon the
timing of the remaining work,
• the effects of implemented compensation events and of notified early
warning matters,
• how the Contractor plans to deal with any delays and to correct notified
Defects and
• any other changes which the Contractor proposes to make to the
Accepted Programme.
3 2. 2 The Contractor submits a revised programme to the Project Manager for
acceptance
• within the period for reply after the Project Manager has instructed him
to,
• when the Contractor chooses to and, in any case,
• at no longer interval than the interval stated in the Contract Data from
the starting date until Completion of the whole of the works.
Access to and use of 33
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the Site 33.1 The Employer allows access to and use of each part of the Site to the Contrac
% tor which is necessary for the work included in this contract. Access and use
::,
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O c3 shown on the Accepted Programme.
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to start work 34.1 The Project Manager may instruct the Contractor to stop or not to start any
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work and may later instruct him that he may re-start or start it.
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35.1 The Employer need not take over the works before the Completion Date if it is
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2?6 stated in the Contract Data that he is not willing to do so. Otherwise the
D.
'a Employer takes over the works not later than two weeks after Completion.
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35.2 The Employer may use any part of the works before Completion has been
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certified. If he does so, he takes over the part of the works when he begins to
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use it except if the use is
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35.3 The Project Manager certifies the date upon which the Employer takes over
any part of the works and its extent within one week of the date.
Acceleration 36
36.1 The Project Manager may instruct the Contractor to submit a quotation for an
acceleration to achieve Completion before the Completion Date. The Project
Manager states changes to the Key Dates to be included in the quotation. A
quotation for an acceleration comprises proposed changes to the Prices and a
revised programme showing the earlier Completion Date and the changed Key
Dates. The Contractor submits details of his assessment with each quotation.
36.2 The Contractor submits a quotation or gives his reasons for not doing so
within the period for reply.

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core cause -rneC3
4 Testing and Defects
Tests and inspections 40
40.1 The subclauses in this clause only apply to tests and inspections required by
the Works Information or the applicable law.
40.2 The Contractor and the Employer provide materials, facilities and samples for
tests and inspections as stated in the Works Information.
40.3 The Contractor and the Supervisor each notifies the other of each of his
tests and inspections before it starts and afterwards notifies the other of its
results. The Contractor notifies the Supervisor in time for a test or inspection
to be arranged and done before doing work which would obstruct the test or
inspection. The Supervisor may watch any test done by the Contractor.
40.4 If a test or inspection shows that any work has a Defect. the Contractor
corrects the Defect and the test or inspection is repeated.
40.5 The Supervisor does his tests and inspections without causing unnecessary
delay to the work or to a payment which is conditional upon a test or inspec

0
tion being successful. A payment which is conditional upon a Supervisor's test
%
or inspection being successful becomes due at the later of the defects date 2
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and the end of the last defect correction period if % v
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• the Supervisor has not done the test or inspection and
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• the delay to the test or inspection is not the Contractor's fault.
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40.6 The Project Manager assesses the cost incurred by the Employer in repeating
a test or inspection after a Defect is found. The Contractor pays the amount "'
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assessed.
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Testing and inspection 41
8 5
before delivery 4 1. 1 The Contractor does not bring to the Working Areas those Plant and Materials
"' b.
which the Works Information states are to be tested or inspected before 0
delivery unti I the Supervisor has notified the Contractor that they have passed
the test or inspection. 0
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Searching for and 42
O 0
Until the defects date, the Supervisor may instruct the Contractor to search for € a
notifying Defects 42.1
E
a Defect. He gives his reason for the search with his instruction. Searching 0
0
may include
• uncovering, dismantling, re-covering and re-erecting work,
• providing facilities, materials and samples for tests and inspections done
by the Supervisor and
• doing tests and inspections which the Works Information does not
require.
42.2 Until the defects date, the Supervisor notifies the Contractor of each Defect as
soon as he finds it and the Contractor notifies the Supervisor of each Defect
as soon as he finds it.
Correcting Defects 43
43.1 The Contractor corrects a Defect whether or not the Supervisor notifies him of
it.
43.2 The Contractor corrects a notified Defect before the end of the defect
correction period. The defect correction period begins at Completion for
Defects notified before Completion and when the Defect is notified for other
Defects.
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neC 3 engineering and construction contract
43.3 The Supervisor issues the Defects Certificate at the later of the defects date
and the end of the last defect correction period. The Employer's rights in
respect of a Defect which the Supervisor has not found or notified are not
affected by the issue of the Defects Certificate.
43.4 The Project Manager arranges for the Employer to allow the Contractor access
to and use of a part of the works which he has taken over if they are needed
for correcting a Defect. In this case the defect correction period begins when
the necessary access and use have been provided.
Accepting Defects 44
44.1 The Contractor and the Project Manager may each propose to the other that
the Works Information should be changed so that a Defect does not have to
be corrected.
44.2 If the Contractor and the Project Manager are prepared to consider the
change, the Contractor submits a quotation for reduced Prices or an earlier
Completion Date or both to the Project Manager for acceptance. If the Project
Manager accepts the quotation, he gives an instruction to change the Works
Information, the Prices and the Completion Date accordingly.
Uncorrected Defects 45
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has not corrected it within its defect correction period, the Project Manager
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- c people and the Contractor pays this amount. The Works Information is treated
0
as having been changed to accept the Defect.

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45.2 If the Contractor is not given access in order to correct a notified Defect
0 before the defects date, the Project Manager assesses the cost to the Contrac
$ tor of correcting the Defect and the Contractor pays this amount. The Works

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Information is treated as having been changed to accept the Defect.

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5 Payment
'
' Assessing the amount due 50
I
f 50.1 The Project Manager assesses the amount due at each assessment date. The
first assessment date is decided by the Project Manager to suit the
I procedures of the Parties and is not later than the assessment interval after
the starting date. Later assessment dates occur
• at the end of each assessment interval until four weeks after the Supervisor
issues the Defects Certificate and
l • at Completion of the whole of the works.
50.2 The amount due is
! • the Price for Work Done to Date,
• plus other amounts to be paid to the Contractor,
• less amounts to be paid by or retained from the Contractor.

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Any tax which the law requires the Employer to pay to the Contractor is
l
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included in the amount due.
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i 50.3 If no programme is identified in the Contract Data, one quarter of the Price
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for Work Done to Date is retained in assessments of the amount due until c c
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the Contractor has submitted a first programme to the Project Manager for
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I acceptance showing the information which this contract requires. 0
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50.4 In assessing the amount due, the Project Manager considers any application 0
for payment the Contractor has submitted on or before the assessment date.
The Project Manager gives the Contractor details of how the amount due has "'
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been assessed.
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50.5 The Project Manager corrects any wrongly assessed amount due in a later c c
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payment certificate.
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Payment 51
51.1 The Project Manager certifies a payment within one week of each assessment
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date. The first payment is the amount due. Other payments are the change in �
c
the amount due since the last payment certificate. A payment is made by the 4
£
Contractor to the Employer if the change reduces the amount due. Other O C
c
payments are made by the Employer to the Contractor. Payments are in the
£
currency of this contract unless otherwise stated in this contract. £
51.2 Each certified payment is made within three weeks of the assessment date or,
if a different period is stated in the Contract Data, within the period stated. If
a certified payment is late, or if a payment is late because the Project
Manager does not issue a certificate which he should issue, interest is paid
on the late payment. Interest is assessed from the date by which the late
payment should have been made until the date when the late payment is
made, and is included in the first assessment after the late payment is made.
51.3 If an amount due is corrected in a later certificate either
• by the Project Manager in relation to a mistake or a compensation event
or
• following a decision of the Adjudicator or the tribunal,
interest on the correcting amount is paid. Interest is assessed from the date
when the incorrect amount was certified until the date when the correcting
amount is certified and is included in the assessment which includes the
correcting amount.
5 1 .4 Interest is calculated on a daily basis at the interest rate and is compounded
annually.
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'
sneC3 sngineenng an constructon contact
Defined Cost 52
52.1 All the Contractor's costs which are not included in the Defined Cost are
treated as included in the Fee. Defined Cost includes only amounts calculated
using rates and percentages stated in the Contract Data and other amounts
at open market or competitively tendered prices with deductions for all
discounts, rebates and taxes which can be recovered.
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6 Compensation events
Compensation events 60
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t 60.1 The following are compensation events.
( 1 ) The Project Manager gives an instruction changing the Works Information

I except
• a change made in order to accept a Defect or
• a change to the Works Information provided by the Contractor for his
design which is made either at his request or to comply with other Works
Information provided by the Employer.
( 2 ) The Employer does not allow access to and use of a part of the Site by the
later of its access date and the date shown on the Accepted Programme.
(3) The Employer does not provide something which he is to provide by the
date for providing it shown on the Accepted Programme.
(4) The Project Manager gives an instruction to stop or not to start any work
or to change a Key Date.
( 5) The Employer or Others
• do not work within the times shown on the Accepted Programme,
• do not work within the conditions stated in the Works Information or
• carry out work on the Site that is not stated in the Works Information.
( 6 ) The Project Manager or the Supervisor does not reply to a communication

6
from the Contractor within the period required by this contract.
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(7) The Project Manager gives an instruction for dealing with an object of
£°
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value or of historical or other interest found within the Site.
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( 8 ) The Project Manager or the Supervisor changes a decision which he has 4
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previously communicated to the Contractor. c
( 9 ) The Project Manager withholds an acceptance (other than acceptance of
a quotation for acceleration or for not correcting a Defect) for a reason not "
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stated in this contract. + @
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(10) The Supervisor instructs the Contractor to search for a Defect and no € £
£
Defect is found unless the search is needed only because the Contractor gave c
c
insufficient notice of doing work obstructing a required test or inspection.
( 1 1 ) A test or inspection done by the Supervisor causes unnecessary delay.
( 1 2 ) The Contractor encounters physical conditions which
• are within the Site,
• are not weather conditions and
• an experienced contractor would have judged at the Contract Date to
able for him to have allowed for them.
Only the difference between the physical conditions encountered and those
for which it would have been reasonable to have allowed is taken into account
in assessing a compensation event.
( 1 3 ) A weather measurement is recorded
• within a calendar month,
• before the Completion Date for the whole of the works and
• at the place stated in the Contract Data
the value of which, by comparison with the weather data, is shown to occur on
average less frequently than once in ten years.
15
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>jeC3 engineenng and construction contract
Only the difference between the weather measurement and the weather which
the weather data show to occur on average less frequently than once in ten
years is taken into account in assessing a compensation event.
( 1 4 ) An event which is an Employer's risk stated in this contract.
( 15) The Project Manager certifies take over of a part of the works before
both Completion and the Completion Date.
( 1 6 ) The Employer does not provide materials, facilities and samples for tests
and inspections as stated in the Works Information.
( 1 7 ) The Project Manager notifies a correction to an assumption which he has
stated about a compensation event.
( 18) A breach of contract by the Employer which is not one of the other
compensation events in this contract.
( 1 9 ) An event which
• stops the Contractor completing the works or
• stops the Contractor completing the works by the date shown on the
Accepted Programme,
and which
$ • neither Party could prevent,

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able for him to have allowed for it and
% • is not one of the other compensation events stated in this contract.
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60.2 In judging the physical conditions for the purpose of assessing a compensa
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tion event, the Contractor is assumed to have taken into account

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publicly available information referred to in the Site Information,
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D. • information obtainable from a visual inspection of the Site and
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expected to have or to obtain.
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60.3 If there is an ambiguity or inconsistency within the Site Information (including
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the information referred to in it), the Contractor is assumed to have taken into
n £ account the physical conditions more favourable to doing the work.

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Notifying compensation 61
8
events 6 1. 1 For compensation events which arise from the Project Manager or the Supervi
sor giving an instruction or changing an earlier decision, the Project Manager
notifies the Contractor of the compensation event at the time of giving the
instruction or changing the earlier decision. He also instructs the Contractor to
submit quotations, unless the event arises from a fault of the Contractor or
quotations have already been submitted. The Contractor puts the instruction
or changed decision into effect.
61.2 The Project Manager may instruct the Contractor to submit quotations for a
proposed instruction or a proposed changed decision. The Contractor does not
put a proposed instruction or a proposed changed decision into effect.
61.3 The Contractor notifies the Project Manager of an event which has happened
or which he expects to happen as a compensation event if
• the Contractor believes that the event is a compensation event and
• the Project Manager has not notified the event to the Contractor.
If the Contractor does not notify a compensation event within eight weeks
of becoming aware of the event, he is not entitled to a change in the Prices,
the Completion Date or a Key Date unless the Project Manager should have
notified the event to the Contractor but did not.

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61.4 If the Project Manager decides that an event notified by the Contractor
• arises from a fault of the Contractor,
• has not happened and is not expected to happen,
• has no effect upon Defined Cost. Completion or meeting a Key Date or
• is not one of the compensation events stated in this contract
he notifies the Contractor of his decision that the Prices, the Completion Date
and the Key Dates are not to be changed.
If the Project Manager decides otherwise, he notifies the Contractor accord
ingly and instructs him to submit quotations.
If the Project Manager does not notify his decision to the Contractor within
either
• one week of the Contractor's notification or
• a longer period to which the Contractor has agreed,
the Contractor may notify the Project Manager to this effect. A failure by the
Project Manager to reply within two weeks of this notification is treated as
acceptance by the Project Manager that the event is a compensation event
and an instruction to submit quotations.
61.5 If the Project Manager decides that the Contractor did not give an early <I)
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warning of the event which an experienced contractor could have given, he u
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notifies this decision to the Contractor when he instructs him to submit c c
quotations.
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6 1. 6 If the Project Manager decides that the effects of a compensation event are
%
too u n c e rt a i n to be forecast reasonably, he states assumptions about the 0
event in his instruction to the Contractor to submit quotations. Assessment of
the event is based on these assumptions. If any of them is later found to have
been wrong, the Project Manager notifies a correction.
6 1. 7 A compensation event is not notified after the defects date.
Quotations for 62
compensation events 62.1 After discussing with the Contractor different ways of dealing with the com
pensation event which are practicable, the Project Manager may instruct the
<I)
Contractor to submit alternative quotations. The Contractor submits the
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required quotations to the Project Manager and may submit quotations for
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other methods of dealing with the compensation event which he considers
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62.2 Quotations for compensation events comprise proposed changes to the Prices
and any delay to the Completion Date and Key Dates assessed by the
I
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Contractor. The Contractor submits deta ils of his assessment with each
quotation. If the programme for remaining work is altered y the compensa

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tion event , the Contractor includes the alterations to the Accepted Prog ramme
t in his quotation.
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62.3 The Contractor submits quotations within three wee ks of being instructed to
do so by the Project Manager. The Project Manager replies within two weeks of
t
t the submission. His reply is
• an instruction to submit a revised quotation ,
• an acceptance of a quotation ,
• a notification that a proposed instruction wi ll not be given or a pro posed
changed decision will not be made or
• a notification that he wi ll be making his own assessmen t.
62 .4 The Project Manager instructs the Contractor to submit a revised quotation
only after e x plaining his reasons for doing so to the Contractor. The Contractor
submits the revised quotation within three wee ks of being instructed to do so.
«c copyright nec 2005 17

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62.5 The Project Manager extends the time allowed for
• the Contractor to submit quotations for a compensation event and
• the Project Manager to reply to a quotation
if the Project Manager and the Contractor agree to the extension before the
submission or reply is due. The Project Manager notifies the extension that
has been agreed to the Contractor.
62.6 If the Project Manager does not reply to a quotation within the time allowed,
the Contractor may notify the Project Manager to this effect. If the Contractor
submitted more than one quotation for the compensation event, he states in
his notification which quotation he proposes is to be accepted. If the Project
Manager does not reply to the notification within two weeks. and unless the
quotation is for a proposed instruction or a proposed changed decision,
the Contractor's notification is treated as acceptance of the quotation by the
Project Manager.
Assessing compensation 63
events 63.1 The changes to the Prices are assessed as the effect of the compensation
event upon
• the actual Defined Cost of the work already done,

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• the forecast Defined Cost of the work not yet done and
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• the resulting Fee.
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% The date when the Project Manager instructed or should have instructed the
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0 Contractor to submit quotations divides the work already done from the work
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not yet done.
63.2 If the effect of a compensation event is to reduce the total Defined Cost, the
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Prices are not reduced except as stated in this contract.
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! % 63.3 A delay to the Completion Date is assessed as the length of time that, due to
.
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3 ¢
as shown on the Accepted Programme. A delay to a Key Date is assessed as
9 the length of time that, due to the compensation event, the planned date
0
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when the Condition stated for a Key Date will be met is later than the date
shown on the Accepted Programme.

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63.4 The rights of the Employer and the Contractor to changes to the Prices, the
7 £
Completion Date and the Key Dates are their only rights in respect of a
Q
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63.5 If the Project Manager has notified the Contractor of his decision that the
Contractor did not give an early warning of a compensation event which an
experienced contractor could have given, the event is assessed as if the
Contractor had given early warning.
63.6 Assessment of the effect of a compensation event includes risk allowances
for cost and time for matters which have a significant chance of occurring and
are at the Contractor's risk under this contract.
63.7 Assessments are based upon the assumptions that the Contractor reacts
competently and promptly to the compensation event, that any Defined Cost
and time due to the event are reasonably incurred and that the Accepted
Programme can be changed.
63.8 A compensation event which is an instruction to change the Works Information
in order to resolve an ambiguity or inconsistency is assessed as if the Prices,
the Completion Date and the Key Dates were for the interpretation most
favourable to the Party which did not provide the Works Information.
63.9 If a change to the Works Information makes the description of the Condition
for a Key Date incorrect, the Project Manager corrects the description. This
correction is taken into account in assessing the compensation event for the
change to the Works Information.

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The Project Manager's 64
assessments 64.1 The Project Manager assesses a compensation event
• if the Contractor has not submitted a quotation and details of his assess
ment within the time allowed,
I • if the Project Manager decides that the Contractor has not assessed the
compensation event correctly in a quotation and he does not instruct the
Contractor to submit a revised quotation,

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• if, when the Contractor submits quotations for a compensation event, he
I
I has not submitted a programme or alterations to a programme which
i
this contract requires him to submit or
• if, when the Contractor submits quotations for a compensation event. the
Project Manager has not accepted the Contractor's latest programme for
one of the reasons stated in this contract.
64.2 The Project Manager assesses a compensation event using his own assess
ment of the programme for the remaining work if
• there is no Accepted Programme or
• the Contractor has not submitted a programme or alterations to a
programme for acceptance as required by this contract.
64.3 The Project Manager notifies the Contractor of his assessment of a compen
0
sation event and gives him details of it within the period allowed for the
%
Contractor's submission of his quotation for the same event. This period
starts when the need for the Project Manager's assessment becomes
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64.4 If the Project Manager does not assess a compensation event within the time :g
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allowed, the Contractor may notify the Project Manager to this effect. If the
Contractor submitted more than one quotation for the compensation event,
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he states in his notification which quotation he proposes is to be accepted. If
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the Project Manager does not reply within two weeks of this notification the
cd
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notification is treated as acceptance of the Contractor's quotation by the c €
9 c
Project Manager.
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I Implementing 65
! compensation events 65.1 A compensation event is implemented when

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• the Project Manager notifies his acceptance of the Contractor's •

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quotation, £
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• the Project Manager notifies the Contractor of his own assessment or u Cl.
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• a Contractor's quotation is treated as having been accepted by the
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Project Manager.
65.2 The assessment of a compensation event is not revised if a forecast upon
which it is based is shown by later recorded information to have been wrong.
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7 Title
The Employer's title to 70
Plant and Materials 70.1 Whatever title the Contractor has to Plant and Materials which is outside the
Working Areas passes to the Employer if the Supervisor has marked it as for
this contract.
70.2 Whatever title the Contractor has to Plant and Materials passes to the
Employer if it has been brought within the Working Areas. The title to Plant
and Materials passes back to the Contractor if it is removed from the Working
Areas with the Project Manager's permission.
Marking Equipment, 71
Plant and Materials 7 1. 1 The Supervisor marks Equipment, Plant and Materials which are outside the
outside the Working Areas Working Areas if
• this contract identifies them for payment and
• the Contractor has prepared them for marking as the Works Information
requires.
$
:,
Removing Equipment 72
c
c 72.1 The Contractor removes Equipment from the Site when it is no longer needed
c
unless the Project Manager allows it to be left in the works.
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Objects and materials 73
within the Site 73.1 The Contractor has no title to an object of value or of historical or other
0
q interest within the Site. The Contractor notifies the Project Manager when such
?
an object is found and the Project Manager instructs the Contractor how to
0
¢ £ deal with it. The Contractor does not move the object without instructions.
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73.2 The Contractor has title to materials from excavation and demolition only as
<I) a. stated in the Works Information.
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8 Risks and insurance
Employer's risks 80
80.1 The following are Employer's risks.
• Claims, proceedings, compensation and costs payable which are due to
• use or occupation of the Site by the works or for the purpose of the
works which is the unavoidable result of the works,
• negligence, breach of statutory duty or interference with any legal right
by the Employer or by any person employed by or contracted to him
except the Contractor or
• a fault of the Employer or a fault in his design.
• Loss of or damage to Plant and Materials supplied to the Contractor by
the Employer, or by Others on the Employer's behalf, until the Contractor
has received and accepted them.
• Loss of or damage to the works, Plant and Materials due to
• war, civil war, rebellion, revolution, insurrection, military or usurped u

0
power, 0
strikes. riots and civil commotion not confined c c

• to the Contractor's
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employees or
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• ra dioactive contamination. 0
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• Loss of or wear or damage to the parts of the works taken over by the 0
Employer, except loss, wear or damage occurring before the issue of the
U
D efects Certificate which is due to <l)
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• a D efect which existed at take over, c5
£
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• an event occurring before take over which was not itself an Employer's
Q e
risk or 85
• the activities of the Contractor on the Site after take over.
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• L oss of or wear or damage to the works and any Eq uipment , Plant and
Materials retained on the Site by the Employer after a termination, <Jl

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except loss, wear or damage due to the activities of the Contractor on the c
Q
S ite after the termination. £
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• A dditional Employer's risks stated in the Contract D ata. 0
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The Contractor's risks 81
8 1. 1 Fro m the starting date until the D efects Certificate has been issued, the risks
which are not carried by the Employer are carried by the Contractor.
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Repairs 82 "
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82.1 U ntil the D efects Certificate has been issued and unless otherwise instructed 55
by the Project Manager, the Contractor promptly replaces loss of and repairs
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damage to the works, Plant and Materials.
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i Indemnity 83
83.1 Each Party i n d e m n i fi e s the other against claims, proceedings, compensation
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and costs due to an event which is at his risk.
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83.2 The liability of each Party to indemni fy the other is reduced if events at the
I other Party's risk contributed to the cl a i m s , proceedings, compensation and
costs. The reduction is in proportion to the extent that events wh i ch were at the
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other Party's risk contributed, taking into account each Party's responsibi l ities
under this contract.

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Insurance cover 84
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The Contractor provides the insurances stated in the Insurance Table except l
84.1
any insurance which the Employer is to provide as stated in the Contract Data. '
The Contractor provides additional insurances as stated in the Contract Data.
84.2 The insurances are in the joint names of the Parties and provide cover for
events which are at the Contractor's risk from the starting date until the
Defects Certificate or a termination certificate has been issued.
INSURANCE TABLE
Insurance against Minimum amount of cover or
minimum limit of indemnity
Loss of or damage to the works, Plant The replacement cost, including the
and Materials amount stated in the Contract Data
for the replacement of any Plant
and Materials provided by the
Employer
Loss of or damage to Equipment The replacement cost

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Liability for loss of or damage to The amount stated in the Contract
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s Materials and Equipment) and liability so that the insurance
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85.3 The Parties comply with the terms and conditions of the insurance policies.
85.4 Any amount not recovered from an insurer is borne by the Employer for events
w hich are at his risk and by the Contractor for events w hich are at his risk.
If the Contractor 86
does not insure 86.1 The Employer may insure a risk which this contract requires the Contractor to
insure if the Contractor does not submit a required certificate. The cost of this
insurance to the Employer is paid by the Contractor.
I nsurance by the Employer 87
87 .1 The Project Manager submits policies and certificates for insurances provided
by the Employer to the Contractor for acceptance before the starting date and
afterwards as the Contractor instructs. The Contractor accepts the policies
and certificates if they comply with this contract.
22 e copyright nec 2005 www .neccontract.com

core caose -nec3
87.2 The Contractor's acceptance of an insurance policy or certificate provided by
the Employer does not change the responsibility of the Employer to provide
the insurances stated in the Contract Data.
87.3 The Contractor may insure a risk which this contract requires the Employer to
insure if the Employer does not submit a required policy or certificate. The
cost of this insurance to the Contractor is paid by the Employer.
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9 Termination
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Termination 90
90.1 If either Party wishes to terminate the Contractor's obligation to Provide the
Works he notifies the Project Manager and the other Party giving details of his
reason for terminating. The Project Manager issues a termination certificate to
both Parties promptly if the reason complies with this contract.
90.2 The Contractor may terminate only for a reason identified in the Termination
Table. The Employer may terminate for any reason. The procedures followed and
the amounts due on termination are in accordance with the Termination Table.
TERMINATION TABLE
Terminating Party Reason Procedure Amount due
The Employer A reason other P1 and P2 Al, A2 and A4
than R1--R21
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R1-R15 0r R18 P l . P2 and P3 Al and A3

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90.4 Within thirteen weeks of termination, the Project Manager certifies a final
payment to or from the Contractor which is the Project Manager's assessment

ti of the amount due on termination less the total of previous payments.
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90.5 After a termination certificate has been issued, the Contractor does no further
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Reasons for termination 91
9 1. 1 Either Party may terminate if the other Party has done one of the following or
its equivalent.
• If the other Party is an individual and has
• presented his petition for bankruptcy ( R 1 ) ,
• had a bankruptcy order made against him ( R 2 ) ,
• had a receiver appointed over his assets ( R3) or
• made an arrangement with his creditors ( R 4 ) .
• If the other Party is a company or partnership and has
• had a winding-up order made against it (R5),
• had a provisional liquidator appointed to it ( R 6 ) ,
• passed a resolution for winding-up (other than in order to amalgamate
or reconstruct) ( R 7 ) ,
• had an administration order made against it ( R 8 ) ,
• had a receiver, receiver and manager, or administrative receiver
appointed over the whole or a substantial part of its undertaking or
assets ( R9) or
• made an arrangement with its creditors ( R 1 0 )
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core causes "neC3
91.2 The Employer may terminate if the Project Manager has notified that the
Contractor has defaulted in one of the following ways and not put the default
right within four weeks of the notification.
• Substantially failed to comply with his obligations ( R 1 1 ) .
• Not provided a bond or guarantee which this contract requires ( R 1 2 ) .
• Appointed a Subcontractor for substantial work before the Project
Manager has accepted the Subcontractor ( R 1 3 ) .
91.3 The Employer may terminate if the Project Manager has notified that the
Contractor has defaulted in one of the following ways and not stopped
defaulting within four weeks of the notification.
• Substantially hindered the Employer or Others ( R 1 4 ) .
• Substantially broken a health or safety regulation ( R 1 5 ) .
91.4 The Contractor may terminate if the Employer has not paid an amount certified
by the Project Manager within thirteen weeks of the date of the certificate
(R16).
91.5 Either Party may terminate if the Parties have been released under the law
from further performance of the whole of this contract ( R 1 7 ) .
91.6 If the Project Manager has instructed the Contractor to stop or not to start any
substantial work or all work and an instruction allowing the work to re-start or
start has not been given within thirteen weeks.
• the Employer may terminate if the instruction was due to a default by the
Contractor ( R 1 8 ) .
• the Contractor may terminate if the instruction was due to a default by
the Employer ( R 1 9 ) and
• either Party may terminate if the instruction was due to any other reason
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91.7 The Employer may terminate if an event occurs which S
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• stops the Contractor completing the works by the date shown on the
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have such a small chance of occurring that it would have been unreason C
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able for him to have allowed for it ( R 2 1 ) .
Procedures on termination 92
92.1 On termination, the Employer may complete the works and may use any Plant
and Materials to which he has title ( P 1 ) .
92.2 The procedure on termination also includes one or more of the following as
set out in the Termination Table.
P2 The Employer may instruct the Contractor to leave the Site, remove any
Equipment. Plant and Materials from the Site and assign the benefit of
any subcontract or other contract related to performance of this contract
to the Employer.
P3 The Employer may use any Equipment to which the Contractor has title to
complete the works. The Contractor promptly removes the Equipment
from Site when the Project Manager notifies him that the Employer no
longer requires it to complete the works.
P4 The Contractor eaves the

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neC 3 Engineering and construction contract
Payment on termination 93
93.1 The amount due on termination includes (Al)
• an amount due assessed as for normal payments.
• the Defined Cost for Plant and Materials
• within the Working Areas or
• to which the Employer has title and of which the Contractor has to
accept delivery,
• other Defined Cost reasonably incurred in expectation of completing the
whole of the works,
• any amounts retained by the Employer and
• a deduction of any un-repaid balance of an advanced payment.
93.2 The amount due on termination also includes one or more of the following as
set out in the Termination Table.
A2 The forecast Defined Cost of removing the Equipment.
A3 A deduction of the forecast of the additional cost to the Employer of com
pleting the whole of the works.
A4 The direct fee percentage applied to
• for Options A, B, C and D, any excess of the total of the Prices at the
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• for Options E and F, any excess of the first forecast of the Defined Cost
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for the works over the Price for Work Done to Date less the Fee.
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MAIN OPTION CLAUSES
Option A: Priced contract with activity schedule
terms 11.2 (20) The Activity Schedule is the activity schedule unless later changed in
(22) Defined Cost is the cost of the components in the Shorter Schedule of
Cost Components whether work is subcontracted or not excluding the cost of
preparing quotations for compensation events.
( 2 7 ) The Price for Work Done to Date is the total of the Prices for
• each group of completed activities and
• each completed activity which is not in a group.
A completed activity is one which is without Defects which would either delay
or be covered by immediately following work.
(30) The Prices are the lump sum prices for each of the activities on the
Activity Schedule unless later changed in accordance with this contract.
The programme 31 0
31.4 The Contractor provides information which shows how each activity on the e8
Activity Schedule relates to the operations on each programme which he co £
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submits for acceptance.
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36.3 When the Project Manager accepts a quotation for an acceleration, he
changes the Prices, the Completion Date and the Key Dates accordingly and
accepts the revised programme. J!1

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54.2 If the Contractor changes a planned method of working at his discretion so
that the activities on the Activity Schedule do not relate to the operations on
the Accepted Programme, he submits a revision of the Activity Schedule to the
Project Manager for acceptance.

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54.3 A reason for not accepting a revision of the Activity Schedule is that (
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• any changed Prices are not reasonably distributed between the activities
or
• the total of the Prices is changed.
J Assessing compensation 63
events 63.10 If the effect of a compensation event is to reduce the total Defined Cost and
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' the event is
• a change to the Works Information or

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• a correction of an assumption stated by the Project Manager for assessing
an earlier compensation event,

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the Prices are reduced.
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' 63.12 Assessments for changed Prices for compensation events are in the form of
changes to the Activity Schedule.
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neC 3 engineering an constructon contract
63.14 If the Project Manager and the Contractor agree, rates and lump sums may be
used to assess a compensation event instead of Defined Cost.
Implementing 65
compensation events 65.4 The changes to the Prices, the Completion Date and the Key Dates are
included in the notification implementing a compensation event.
93.3 The amount due on termination is assessed without taking grouping of
activities into account.
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Main Option Clauses -nec3
Option B: Priced contract with bill of quantities
terms 11.2 (21) The Bill of Quantities is the bill of quantities as changed in accordance
with this contract to accommodate implemented compensation events and for
accepted quotations for acceleration.
(22) Defined Cost is the cost of the components in the Shorter Schedule of
Cost Components whether work is subcontracted or not excluding the cost of
preparing quotations for compensation events.
( 28) The Price for Work Done to Date is the total of
• the quantity of the work which the Contractor has completed for each
item in the Bili of Quantities multiplied by the rate and
• a proportion of each lump sum which is the proportion of the work
covered by the item which the Contractor has completed.
Completed work is work without Defects which would either delay or be
covered by immediately following work.
(31) The Prices are the lump sums and the amounts obtained by multiplying
the rates by the quantities for the items in the Bili of Quantities.
Acceleration 36
I
accepts the revised programme. 0
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I The Bill of Quantities 55
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55 .1 Information in the Bill of Quantities is not Works Information or Site Information. c o
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Compensation events 60 ,,, E.
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i 60.4 A difference between the final total quantity of work done and the quantity
I stated for an item in the Bill of Quantities is a compensation event if
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• the difference does not result from a change to the Works Information, c
• the difference causes the Defined Cost per unit of quantity to change • £
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and
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• the rate in the Bili of Quantities for the item multiplied by the final total E
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quantity of work done is more than 0.5% of the total of the Prices at the
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L Contract Date.
If the Defined Cost per unit of quantity is reduced, the affected rate is
i
reduced.
60.5 A difference between the final total quantity of work done and the quantity for
t an item stated in the Bili of Quantities which delays Completion or the meet
I
ing of the Condition stated for a Key Date is a compensation event.
60.6 The Project Manager corrects mistakes in the Bili of Quantities which are
I
departures from the rules for item descriptions and for division of the work
into items in the method of measurement or are due to ambi g u i ties or

I
inconsistencies. Each such correction is a compensation event which may
I
lead to reduced Prices.
60 . 7 In assessing a compensation event which results from a correction of an
inconsistency between the Bili of Quantities and another document, the
Contractor is assumed to have taken the Bill of Quantities as correct.

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the event is
• a change to the Works Information or
• a correction of an assumption stated by the Project Manager for assessing
an earlier compensation event,
63.13 Assessments for changed Prices for compensation events are in the form of
changes to the Bill of Quantities.
• For the whole or a part of a compensation event for work not yet done
and for which there is an item in the Bill of Quantities, the changes are
• a changed rate,
• a changed quantity or
• a changed lump sum.
and for which there is no item in the Bill of Quantities, the change is a
new priced item which, unless the Project Manager and the Contractor
agree otherwise, is compiled in accordance with the method of measure
ment.
• For the whole or a part of a compensation event for work already done,
I
the change is a new lump sum item.
If the Project Manager and the Contractor agree, rates and lump sums may be
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used to assess a compensation event instead of Defined Cost. !
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Main opton cause, -rnec3
Option C: Target contract with activity schedule
terms 11.2 (20) The Activity Schedule is the activity schedule unless later changed in
l accordance with this contract.
( 2 3 ) Defined Cost is
• the amount of payments due to Subcontractors for work which is subcon
tracted without taking account of amounts deducted for

I
• retention,
• payment to the Employer as a result of the Subcontractor failing to

1
meet a Key Date,
• the correction of Defects after Completion,
• payments to Others and
• the supply of equipment, supplies and services included in the charge
for overhead cost within the Working Areas in this contract
and
• the cost of components in the Schedule of Cost Components for other
work
less Disallowed Cost.
(25) Disallowed Cost is cost which the Project Manager decides
• is not justified by the Contractor's accounts and records,

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• should not have been paid to a Subcontractor or supplier in accordance 8
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• was incurred only because the Contractor did not g c
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• follow an acceptance or procurement procedure stated in the Works
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• give an early warning which this contract required him to give
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and the cost of •
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• correcting Defects after Completion, <Jl C
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• correcting Defects caused by the Contractor not complying with a
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constraint on how he is to Provide the Works stated in the Works
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Information,
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• Plant and Materials not used to Provide the Works (after allowing for
reasonable wastage) unless resulting from a change to the Works
Information,
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• resources
availability
not used to Provide the Works ( after allowing for reasonable
and utilisation) or not taken away from the Working Areas

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when the Project Manager requested and

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• preparation for and conduct of an adjudication or proceedings of the
tribunal.
{ (29) The Price for Work Done to Date is the total Defined Cost which the
;'· Project Manager forecasts will have been paid by the Contractor before the
l. next assessment date plus the Fee.
h (30 ) The Prices are the lump sum prices for each of the activities on the
Activity Schedule unless later changed in accordance with this contract.
the
i· Providing Works ��.3 The contractor advises the Project Manager on the practical implications of
the design of the works and on subcontracting arrangements.

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>neC 3 engineering and construction contract
20.4 The Contractor prepares forecasts of the total Defined Cost for the whole of
the works in consultation with the Project Manager and submits them to
the Project Manager. Forecasts are prepared at the intervals stated in the
Contract Data from the starting date until Completion of the whole of the
works. An explanation of the changes made since the previous forecast is
submitted with each forecast.
Subcontracting 26
26.4 The Contractor submits the proposed contract data for each subcontract for
acceptance to the Project Manager if
• an NEC contract is proposed and
• the Project Manager instructs the Contractor to make the submission.
A reason for not accepting the proposed contract data is that its use will not
allow the Contractor to Provide the Works.
The programme 31
31.4 The Contractor provides information which shows how each activity on the
Activity Schedule relates to the operations on each programme which he
submits for acceptance.
Acceleration 36
accepts the revised programme.
40.7 When the Project Manager assesses the cost incurred by the Employer in
repeating a test or inspection after a Defect is found, the Project Manager

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inspection.
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9 5 Assessing the amount due 50

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a 50.6 Payments of Defined Cost made by the Contractor in a currency other than the
0
currency of this contract are included in the amount due as payments to be
made to him in the same currency. Such payments are converted to the
2 currency of this contract in order to calculate the Fee and any Contractor's
_
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share using the exchange rates.
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Defined Cost 52
E
0 52.2 The Contractor keeps these records
0
• accounts of payments of Defined Cost,
• proof that the payments have been made,
• communications about and assessments of compensation events for
Subcontractors and
• other records as stated in the Works Information.
52.3 The Contractor allows the Project Manager to inspect at any time within
working hours the accounts and records which he is required to keep.
The Contractor's share 53
53.1 The Project Manager assesses the Contractor's share of the difference
between the total of the Prices and the Price for Work Done to Date. The differ
ence is divided into increments falling within each of the share ranges. The
limits of a share range are the Price for Work Done to Date divided by the
total of the Prices, expressed as a percentage. The Contractor's share equals
the sum of the products of the increment within each share range and the
corresponding Contractor's share percentage.
53.2 If the Price for Work Done to Date is less than the total of the Prices, the
Contractor is paid his share of the saving. If the Price for Work Done to Date is
greater than the total of the Prices, the Contractor pays his share of the
excess.
32 c copyright nec 2005 www.neccontract.com

vain oton caos% eneC3
53.3 The Project Manager makes a preliminary assessment of the Contractor's
share at Completion of the whole of the works using his forecasts of the final
Price for Work Done to Date and the final total of the Prices. This share is
included in the amount due following Completion of the whole of the works.
53.4 The Project Manager makes a final assessment of the Contractor's share
using the final Price for Work Done to Date and the final total of the Prices.
This share is included in the final amount due.
The Activity Schedule 54
54.1 Information in the Activity Schedule is not Works Information or Site Information.
54.2 If the Contractor changes a planned method of working at his discretion so
that the activities on the Activity Schedule do not relate to the operations on
the Accepted Programme, he submits a revision of the Activity Schedule to the
Project Manager for acceptance.
54.3 A reason for not accepting a revision of the Activity Schedule is that
• it does not comply with the Accepted Programme,
• any changed Prices are not reasonably distributed between the activities
or
• the total of the Prices is changed.
the event is
• a change to the Works Information, other than a change to the Works
Information provided by the Employer which the Contractor proposed and
the Project Manager has accepted or

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• a correction of an assumption stated by the Project Manager for asses eu
sing an earlier compensation event, ¢
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the Prices are reduced. g c
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63.12 Assessments for changed Prices for compensation events are in the form of 0
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changes to the Activity Schedule.
63.15 If the Project Manager and the Contractor agree, the Contractor assesses a
compensation event using the Shorter Schedule of Cost Components. The 2

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Project Manager may make his own assessments using the Shorter Schedule £
0 0
of Cost Components. a
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Implementing 65
93.4 If there is a termination, the Project Manager assesses the Contractor's share
after he has certified termination. His assessment uses, as the Price for Work
Done to Date, the total of the Defined Cost which the Contractor has paid and
which he is committed to pay for work done before termination. The assess
ment uses as the total of the Prices
• the lump sum price for each activity which has been completed and
• a proportion of the lump sum price for each incomplete activity which is
l.
the proportion of the work in the activity which has been completed.
f 93.6 The Project Manager's assessment of the Contractor's share is added to the
amount due to the Contractor on termination if there has been a saving or

I deducted if there has been an excess.
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Option D: Target contract with bill of quantities
terms 11.2 (21) The Bill of Quantities is the bill of quantities as changed in accordance
with this contract to accommodate implemented compensation events and for
accepted quotations for acceleration.
(23) Defined Cost is
• retention,
meet a Key Date,
and
work
(25) Dis allowed Cost is cost which the Project Manager decides
• is not justified by the Contractor's accounts and records ,
• should not have been paid to a Subcontractor or supplier in accordance
with his contract ,
• was incurred onl y because the Contractor did not
• follow an acce ptance or procurement pr ocedure stated in the Works
Information or
,,,
and the cost of
z
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n £ • correctin g Defects after Completion ,
5 0
5 0 • correcting Defects caused by the Contractor not compl ying with a con
£
straint on ho w he is to Provide the Works stated in the Works Information,
8
• Plant and Materials not used to Provide the Works (a fter a llowing for
reasonable wastage) unle ss resul ting from a change to the Works Infor
mation ,
• re sources not us ed to Provide the Works ( after a llowing for reasonable
a vailability and u tilisation) or not taken away f rom the Working Areas

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• preparat on i for and conduct of an ad judication or p roceedings of th e
r l
tribunal.
t
(29) The Price for Work Done to Date is the total De fined Cost which th e
Project Manager for ecasts w ill have been paid by the Contractor before the xt
ne
f
assessment date plus the Fee.
( 3 1 ) The Prices are the lump sums and the amount s obtaine d by multiplyin g
the rates by the quantities for the items in the B i ll of Quantities.
( 33 ) The Total of the Prices is the tota l of
• the quantity of the work which the Contractor has com pleted for eac h
item in the Bill of Quantities multip lied by the rate and
• a propo rtion of each l ump sum which is the p roportion of the wor k
covered by the item which the Con tractor has completed .
Complete d work is wor k without Defects which would either delay or be
covered by immediately fo llowing work .

Main ooton cause <"neC3
20.3 The Contractor advises the Project Manager on the practical implications of
the works in consultation with the Project Manager and submits them to the
Project Manager. Forecasts are prepared at the intervals stated in the
Subcontracting 26
Acceleration 36
accepts the revised programme.
40.7 When the Project Manager assesses the cost incurred by the Employer in
does not include the Contractor's cost of carrying out the repeat test or
inspection.
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50.6 Payments of Defined Cost made by the Contractor in a currency other than the
85
currency of this contract are included in the amount due as payments to be "' o'.
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currency of this contract in order to calculate the Fee and any Contractor's
share using the exchange rates. J!J

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Defined Cost 52 O
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52.2 The Contractor keeps these records

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Subcontractors and
working hours the accounts and records which he is required to keep.
The Contractor's share 53
53.5 The Project Manager assesses the Contractor's share of the difference
between the Total of the Prices and the Price for Work Done to Date. The
difference is divided into increments falling within each of the share ranges.
The limits of a share range are the Price for Work Done to Date divided by the
Total of the Prices, expressed as a percentage. The Contractor's share equals
the sum of the products of the increment within each share range and the
corresponding Contractor's share percentage.
53.6 If the Price for Work Done to Date is less than the Total of the Prices, the
Contractor is paid his share of the saving. If the Price for Work Done to Date is
greater than the Total of the Prices, the Contractor pays his share of the
excess.
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w copyright nec 2005 35
l
53.7 The Project Manager makes a preliminary assessment of the Contractor's
share at Completion of the whole of the works using his forecasts of the final
Price for Work Done to Date and the final Total of the Prices. This share is
included in the amount due following Completion of the whole of the works.
53.8 The Project Manager makes a final assessment of the Contractor's share
using the final Price for Work Done to Date and the final Total of the Prices.
This share is included in the final amount due.
The Bill of Quantities 55
55.1 Information in the Bill of Quantities is not Works Information or Site Informa
tion.
Compensation events 60
60.4 A difference between the final total quantity of work done and the quantity
stated for an item in the Bill of Quantities is a compensation event if
• the difference does not result from a change to the Works Information,
• the difference causes the Defined Cost per unit of quantity to change
and
• the rate in the Bill of Quantities for the item multiplied by the final total
quantity of work done is more than 0.5% of the total of the Prices at the
Contract Date.
If the Defined Cost per unit of quantity is reduced, the affected rate is
reduced.
60.5 A difference between the final total quantity of work done and the quantity for
an item stated in the Bill of Quantities which delays Completion or the meet
ing of the Condition stated for a Key Date is a compensation event.
60.6 The Project Manager corrects mistakes in the Bill of Quantities which are
departures from the rules for item descriptions and for division of the work
into items in the method of measurement or are due to ambiguities or
inconsistencies. Each such correction is a compensation event which may
lead to reduced Prices.
60.7 In assessing a compensation event which results from a correction of an
<J) inconsistency between the Bill of Quantities and another document, the
•
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£
events 63.11 If the effect of a compensation event is ta reduce the total Defined Cost and
8
the event is
• a change to the Works Information, other than a change to the Works
Information provided by the Employer which the Contractor proposed and
the Project Manager has accepted or
• a correction of an assumption stated by the Project Manager for asses
sing an earlier compensation event,
63.13 Assessments for changed Prices for compensation events are in the form of
changes to the Bill of Quantities.
and for which there is an item in the Bill of Quantities, the changes are
• achanged rate,
• achanged quantity or
• a changed lump sum.
• For the whole or a part of a compensation event for work not yet done and
for which there is no item in the Bill of Quantities, the change is a new
priced item which, unless the Project Manager and the Contractor agree
otherwise, is compiled in accordance with the method of measurement.
36 • copyright nec 2005

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vain ooton cases <=neC3
• For the whole or a part of a compensation event for work already done,
the change is a new lump sum item.
If the Project Manager and the Contractor agree, rates and lump sums may be
used to assess a compensation event instead of Defined Cost.
63.15 If the Project Manager and the Contractor agree, the Contractor assesses a
compensation event using the Shorter Schedule of Cost Components. The
Project Manager may make his own assessments using the Shorter Schedule
of Cost Components.
Implementing 65
93.5 If there is a termination, the Project Manager assesses the Contractor's share
after he has certified termination. His assessment uses, as the Price for Work
Done to Date, the total of the Defined Cost which the Contractor has paid and
which he is committed to pay for work done before termination.
93.6 The Project Manager's assessment of the Contractor's share is added to the
amounts due to the Contractor on termination if there has b een a saving or
deducted if there has een an excess.

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Option E: Cost reimbursable contract
terms 1 1. 2 (23) Defined Cost is
tracted without ta king account of amounts deducted for
• retention,
meet a Key Date,
and
work
(25) Disallowed Cost is cost which the Project Manager decides
• is not justified by the Contractor's accounts and records,
with his contract,
• was incurred only because the Contractor did not
• follow an acceptance or procurement procedure stated in the Works
Information or
and the cost of
• correcting Defects after Completion,
• correcting Defects caused by the Contractor not complying with a const
raint on how he is to Provide the Works stated in the Works Information,
• Plant and Materials not used to Pro vide the Works (after allowing for
reasonable wastage) unless resulting from a change to the Works Infor
mation,
• resources not used to Provide the Works (after allowing for reasonable
availabi lity and ut ilisation) or not taken awa y from the Workin g Areas
• preparation for and conduct of an ad judication or proceedin gs of the
tribunal.
( 2 9) The Price for Work Done to Date is the total Defined Cost which the
Project Manager forecasts will have been paid by the Contractor before the
next assessment dat e plus the Fee.
( 3 2 ) The Prices are the Defined Cost plus the Fee.
38 copyright nec 2005 www.necc ontract.com

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I vain option cases erneC3
Subcontracting 26
Acceleration 36
changes the Completion Date, the Key Dates and the forecast of the total
Defined Cost of the whole of the works accordingly and accepts the revised
programme.
Tests and Inspections 40 u

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40.7 When the Project Manager assesses the cost incurred by the Employer in • U
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50.7 Payments of De fined Cost made by the Contractor in a currency other than the
currency of this contract are included in the amount due as pa yments to be
made to h m i in the same cu rrency. Such pa yments are con verted to the
currency of this contract in order to calculate the Fee using the exchange
rates.
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Defined Cost 52 .,
52.2 The Contractor kee ps these records
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• other ecords
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events 63.15 If the Project Manager and the Contractor a gree, the Contractor assesses a
t compensa tion event using the Shorter Schedule of Cost Components . The
t Project Manager may make his own assessments using the Shorter Schedule
•·
of Cost Components .
Implementing 65
compensation events 65.3 The chan ges to the forecast amount of the Prices , the Completion Date and
I the Key Dates are included in the notification implementing a compensation
event.
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Option F: Management contract
terms 11.2 ( 2 4 ) Defined Cost is
• retention,
meet a Key Date,
• payments to Others,
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• the prices for work done by the Contractor himself
(2 6 ) Disallowed Cost is cost which the Project Manager decides
• is not justified by the accounts and records provided by the Contractor,
with his contract,
• was incurred only because the Contractor did not
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• the Contractor's management.

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( 3 2 ) The Prices are the Defined Cost plus the Fee.
20.2 The Contractor manages the Contractor's design, the provision of Site services
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tracts the Contractor's design, the provision of Site services and the
construction and installation of the works except work which the Contract
Data states that he will do himself.

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20.5 If work which the Contractor is to do himself is affected by a compensation
event, the Project Manager and the Contractor agree the change to the price
for the work and any change to the Completion Date and Key Dates. If they
cannot agree, the Project Manager decides the change.
Subcontracting 26
Acceleration 36
changes the Completion Date, the Key Dates and the forecast of the total
Defined Cost of the whole of the works accordingly and accepts the revised
programme.
50.7 Payments of Defined Cost made by the Contractor in a currency other than the
currency of this contract are included in the amount due as payments to be
currency of this contract in order to calculate the Fee using the exchange «
rates.
Defined Cost 52
52.2 The Contractor keeps these records
Subcontractors and
working hours the accounts and records which he is required to keep. £

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compensation events 65.3 The changes to the forecast amount of the Prices, the Completion Date and
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event.
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DISPUTE RESOLUTION
Option W1
Dispute resolution procedure (used unless the United Kingdom Housing Grants, Construction and Regeneration Act
1996 applies).
Dispute resolution W1
W1.1 A dispute arising under or in connection with this contract is referred to and
decided by the Adjudicator.
The Adjudicator W1.2 ( 1 ) The Parties appoint the Adjudicator under the NEC Adjudicator's Contract
current at the starting date.
(2) The Adjudicator acts impartially and decides the dispute as an indepen
dent adjudicator and not as an arbitrator.
( 3) If the Adjudicator is not identified in the Contract Data or if the Adjudicator
resigns or is unable to act, the Parties choose a new adjudicator jointly. If the
Parties have not chosen an adjudicator, either Party may ask the Adjudicator
nominating body to choose one. The Adjudicator nominating body chooses an
adjudicator within four days of the request. The chosen adjudicator becomes
the Adjudicator.
( 4) A replacement Adjudicator has the power to decide a dispute referred to
his predecessor but not decided at the time when the predecessor resigned or
became unable to act. He deals with an undecided dispute as if it had been
referred to him on the date he was appointed.
(5) The Adjudicator, his employees and agents are not liable to the Parties
for any action or failure to take action in an adjudication unless the action or
£ failure to take action was in bad faith.

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E the Adjudication Table.
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42 copyright nec 2005 www.neccontract.com ww

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Dispute Resotuton <=neC3
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ADJUDICATION TABLE
Dispute about Which Party may When may it be referred to the
refer it to the Adjudicator?
Adjudicator?
An action of the The Contractor Between two and four weeks
Project Manager or after the Contractor's
the Supervisor notification of the dispute to the
Employer and the Project
Manager, the notification itself
being made not more than four
weeks after the Contractor
becomes aware of the action
The Project Manager The Contractor Between two and four weeks
or Supervisor not after the Contractor's

I
having taken an notification of the dispute to the
action Employer and the Project
Manager, the notification itself
being made not more than four
weeks after the Contractor
becomes aware that the action
was not taken
A quotation for a The Employer Between two and four weeks
compensation event after the Project Manager's
which is treated as notification of the dispute to the
having been Employer and the Contractor,

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(2) The times for notifying and referring a dispute may be extended by the c
Project Manager if the Contractor and the Project Manager agree to the exten
sion before the notice or referral is due. The Project Manager notifies the
extension that has been agreed to the Contractor. If a disputed matter is not
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(3) The Party referring the dispute to the Adjudicator includes with his referral
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information to be considered by the Adjudicator. Any more information from a
Party to be considered by the Adjudicator is provided within four weeks of the
referral. This period may be extended if the Adjudicator and the Parties agree.
(4) If a matter disputed by the Contractor under or in connection with a
subcontract is also a matter disputed under or in connection with this contract
and if the subcontract allows, the Contractor may refer the subcontract dis
pute to the Adjudicator at the same time as the main contract referral. The
Adjudicator then decides the disputes together and references to the Parties
for the purposes of the dispute are interpreted as including the Subcontractor.

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Option W2
Dispute resolution procedure (used in the United Kingdom when the Housing Grants, Construction and Regeneration
Act 1996 applies).
Dispute resolution W2
W2.1 ( 1 ) A dispute arising under or in connection with this contract is referred to
and decided by the Adjudicator. A Party may refer a dispute to the Adjudicator
at any time.
(2) In this Option, time periods stated in days exclude Christmas Day, Good
Friday and bank holidays.
The Adjudicator W2.2 ( 1 ) The Parties appoint the Adjudicator under the NEC Adjudicator's Contract
current at the starting date.
( 2 ) The Adjudicator acts impartially and decides the dispute as an indepen
dent adjudicator and not as an arbitrator.
(3) If the Adjudicator is not identified in the Contract Data or if the Adjudicator
resigns or becomes unable to act
• the Parties may choose an adjudicator jointly or
• a Party may ask the Adjudicator nominating body to choose an adjudicator.
The Adjudicator nominating body chooses an adjudicator within four days of
the request. The chosen adjudicator becomes the Adjudicator.
( 4) A replacement Adjudicator has the power to decide a dispute referred to
his predecessor but not decided at the time when his predecessor resigned or
became unable to act. He deals with an undecided dispute as if it had been
referred to him on the date he was appointed.
( 5 ) The Adjudicator, his employees and agents are not liable to the Parties for
any action or failure to take action in an adjudication unless the action or
failure to take action was in bad faith.

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The adjudication w2.3 (1) Before a Party refers a dispute to the Adjudicator, he gives a notice of
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adjudication to the other Party with a brief description of the dispute and the 0 0
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decision which he wishes the Adjudicator to make. If the Adjudicator is named £

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in the Contract Data, the Party sends a copy of the notice of adjudication to 0
the Adjudicator when it is issued. Within three days of the receipt of the notice
of adjudication, the Adjudicator notifies the Parties
• that he is able to decide the dispute in accordance with the contract or
• that he is unable to decide the dispute and has resigned.
If the Adjudicator does not so notify within three days of the issue of the
notice of adjudication, either Party may act as if he has resigned.
( 2 ) Within seven days of a Party giving a notice of adjudication he
• refers the dispute to the Adjudicator,
• provides the Adjudicator with the information on which he relies, including
any supporting documents and
• provides a copy of the information and supporting documents he has pro-
vided to the Adjudicator to the other Party.
Any further information from a Party to be considered by the Adjudicator is
provided within fourteen days of the referral. This period may be extended if
the Adjudicator and the Parties agree.
www.neccontract.com o copyright nec 2005 45

»>neC 3 Engineering and constructon contract
(3) If a matter disputed by the Contractor under or in connection with a

subcontract is also a matter disputed under or in connection with this
contract, the Contractor may, with the consent of the Subcontractor, refer the
subcontract dispute to the Adjudicator at the same time as the main contract
referral. The Adjudicator then decides the disputes together and references to
the Parties for the purposes of the dispute are interpreted as including the
Subcontractor.
(4) The Adjudicator may
• review and revise any action or inaction of the Project Manager or
Supervisor related to the dispute and alter a quotation which has been
treated as having been accepted,
• take the initiative in ascertaining the facts and the law related to the
dispute,
• instruct a Party to provide further information related to the dispute
within a stated time and
• i nstruct a arty to take any other action

P w hich he considers necessary to
reach his decision and to do so within a stated time.
(5) If a Party does not comply with any instruction within the time stated by
the Adjudicator, the Adjudicator may continue the adjudication and make his
decision based upon the information and evidence he has received.
(6) A communication between a P arty and the Adjudicator is communicated to
the other Party at the same time.
( 7) If the Adjudicator's decision includes assessment of additional cost or
delay caused to the Contractor, he makes his assessment n the same way as
i
a compensation event is assessed.
(8) The Adjudicator decides the dispute and notifies the Parties and the
3
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Project Manager of his decision and his reasons within twenty-eight days of

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the dispute being referred to him. This period may be extended by up to four
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teen days with the consent of the referring Party or by any other period agreed
3s by the P arties.
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( 9) Unless and until the Adjudicator has notified the Parties of his decision,
the Parties, the Project Manager and the Supervisor proceed as if the matter
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disputed was not disputed.
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£ (10) I f the Adjudicator does not make his decision and notify it to the Parties
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£ agree to extend the period for making his decision. If they do not agree to an
8 extension, either Party may act as if the Adjudicator has resigned.
(11) The Adjudicator's decision s

i binding on the Parties unless and until
revised by the tribunal and is enforceable as a matter of contractual obligation
between the P arties and not as an arbitral award. The Adjudicator's decision
is final and binding if neither Party has notified the other within the times
required by this contract that he is dissatisfied with a matter decided by the
Adjudicator and intends to refer the matter to the tribunal.
( 1 2 ) The Adjudicator may, within fourteen days of giving his decision to the
P arties, correct a clerical mistake or ambiguity.
Review by the tribunal W2.4 (1) A Party does not refer any dispute under or in connection with this
contract to the tribunal unless it has first been decided by the Adjudicator in
(2) If, after the Adjudicator notifies his decision a Party is dissatisfied, that
Party may notify the other Party of the matter which he disputes and state
that he intends to refer t to the tribunal.

i The dispute may not be referred to
the tribunal unless this notification is given within four weeks of the notifica
tion of the Adjudicator's decision.
46 • copyright nec 2005 www .neccontract.com

Dispute Resot0on, -neC3
( 3 ) The tribunal settles the dispute referred to it. The tribunal has the powers
to reconsider any decision of the Adjudicator and to review and revise any
action or inaction of the Project Manager or the Supervisor related to the
dispute. A Party is not limited in tribunal proceedings to the information or
evidence put to the Adjudicator.
( 4) If the tribunal is arbitration, the arbitration procedure, the place where the
arbitration is to be held and the method of choosing the arbitrator are those
( 5) A Party does not call the Adjudicator as a witness in tribunal proceedings.
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SECONDARY OPTION CLAUSES
Option Xi: Price adjustment for inflation (used only with Options A, B, C and D)
Defined terms X1
Xl.1 ( a ) The Base Date Index ( B ) is the latest available index before the base date.
(b) The Latest Index (L) is the latest available index before the date of
assessment of an amount due.
(c) The Price Adjustment Factor is the total of the products of each of the
proportions stated in the Contract Data multiplied by (L - B)/B for the index
linked to it.
Price Adjustment Factor X1.2 If an index is changed after it has been used in calculating a Price Adjustment
g Factor, the calculation is repeated and a correction included in the next

<I)
assessment of the amount due.

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a The Price Adjustment Factor calculated at the Completion Date for the whole
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0 of the works is used for calculating price adjustment after this date.
3 Compensation events Xl.3 The Defined Cost for compensation events is assessed using the
• Defined Cost current at the time of assessing the compensation event
adjusted to base date by dividing by one plus the Price Adjustment
Factor for the last assessment of the amount due and
• Defined Cost at base date levels for amounts calculated from rates
stated in the Contract Data for employees and Equipment.
Price adjustment Options Xl.4 Each amount due includes an amount for price adjustment which is the sum
A and B of
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, Q) • the change in the Price for Work Done to Date since the last assessment
n £
5 g of the amount due multiplied by the Price Adjustment Factor for the date
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• the amount for price adjustment included in the previous amount due
and
• correcting amounts, not included elsewhere, which arise from changes to
indices used for assessing previous amounts for price adjustment.
Price adjustment Options Xl.5 Each time the amount due is assessed, an amount for price adjustment is
C and D added to the total of the Prices which is the sum of
• the change in the Price for Work Done to Date since the last assessment
of the amount due multiplied by (PAF/(1 +PAF)) where PAF is the Price
Adjustment Factor for the date of the current assessment and
• correcting amounts, not included elsewhere, which arise from changes to
indices used for assessing previous amounts for price adjustment.

secondary opton case, erneC3
Option X2: Changes in the law
Changes in the law X2
X2.1 A change in the law of the country in which the Site is located is a compensa
tion event if it occurs after the Contract Date. The Project Manager may notify
the Contractor of a compensation event for a change in the law and instruct
him to submit quotations. If the effect of a compensation event which is a
change in the law is to reduce the total Defined Cost, the Prices are reduced.
Option X3: Multiple currencies (used only with Options A and B)

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Multiple currencies X3 13
X3.1 The Contractor is paid in currencies other than the currency of this contract for
the items or activities listed in the Contract Data. The exchange rates are
used to convert from the currency of this contract to other currencies. en
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X3.2 Payments to the Contractor in currencies other than the currency of this 2
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contract do not exceed the maximum amounts stated in the Contract Data. « c
Any excess is paid in the currency of this contract. E c
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Option X4: Parent company guarantee
Parent company X4
guarantee X4.1 If a parent company owns the Contractor, the Contractor gives to the Employer
a guarantee by the parent company of the Contractor's performance in the en
form set out in the Works Information. If the guarantee was not given by the -
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Contract Date, it is given to the Employer within four weeks of the Contract • £
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Option X5: Sectional Completion
Sectional Completion XS
X5.1 In these conditions of contract, unless stated as the whole of the works, each
l reference and clause relevant to
I
• the works,
• Completion and
• Completion Date
applies, as the case may be, to either the whole of the works or any section of
the works.

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sneC 3 cngneenng and construction contract
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i
Option X6: Bonus tor early Completion
Bonus for early Completion X6
X6.1 The Contractor is paid a bonus calculated at the rate stated in the Contract
Data for each day from the earlier of
• Completion and
• the date on which the Employer takes over the works
until the Completion Date.
Option X7: Delay damages
Delay damages X7
X7.1 The Contractor pays delay damages at the rate stated in the Contract Data
from the Completion Date for each day until the earlier of
• Completion and
• the date on which the Employer takes over the works.
X7 .2 If the Completion Date is changed to a later date after delay damages have
been paid, the Employer repays the overpayment of damages with interest.
Interest is assessed from the date of payment to the date of repayment and
the date of repayment is an assessment date.
X7 .3 If the Employer takes over a part of the works before Completion, the delay
damages are reduced from the date on which the part is taken over. The
Project Manager assesses the benefit to the Employer of taking over the part
of the works as a proportion of the benefit to the Employer of taking over the
whole of the works not previously taken over. The delay damages are reduced
in this proportion.
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Option X12: Partnering
Identified and defined X12
terms X12.1 ( 1 ) The Partners are those named in the Schedule of Partners. The Client is a
Partner.
( 2 ) An Own Contract is a contract between two Partners which includes this
Option.
(3) The Core Group comprises the Partners listed in the Schedule of Core
Group Members.
(4) Partnering Information is information which specifies how the Partners
work together and is either in the documents which the Contract Data states
it is in or in an instruction given in accordance with this contract.
( 5) A Key Performance indicator is an aspect of performance for which a
target is stated in the Schedule of Partners.
50 copyright nec 2005 www.neccontract.com waw

secondary option causes <neC3
Actions X12.2 ( 1) Each Partner works with the other Partners to achieve the Client's objective
stated in the Contract Data and the objectives of every other Partner stated in
the Schedule of Partners.
(2) Each Partner nominates a representative to act for it in dealings with
other Partners.
( 3) The Core Group acts and takes decisions on behalf of the Partners on
those matters stated in the Partnering Information.
( 4) The Partners select the members of the Core Group. The Core Group
decides how they will work and decides the dates when each member joins
and leaves the Core Group. The Client's representative leads the Core Group
unless stated otherwise in the Partnering Information.
( 5) The Core Group keeps the Schedule of Core Group Members and the
Schedule of Partners up to date and issues copies of them to the Partners
each time either is revised. u,

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(6) This Option does not create a legal partnership between Partners who are
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not one of the Parties in this contract. 0
Working together X12.3 ( 1 ) The Partners work together as stated in the Partnering Information and in
a spirit of mutual trust and co-operation.

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( 2 ) A Partner may ask another Partner to provide information which he needs • _ ::,
to carry out the work in his Own Contract and the other Partner provides it. [ [
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(3) Each Partner gives an early warning to the other Partners when he ] £
becomes aware of any matter that could affect the achievement of another '
Partner's objectives stated in the Schedule of Partners. o
( 4) The Partners use common information systems as set out in the Partner
ing Information.
(5) A Partner implements a decision of the Core Group by issuing instructions
in accordance with its Own Contracts.
(6) The Core Group may give an instruction to the Partners to change the
Partnering Information. Each such change to the Partnering Information is a
compensation event which may lead to reduced Prices.
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( 7) The Core Group prepares and maintains a timetable showing the proposed
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timing of the contributions of the Partners. The Core Group issues a copy of 0 0
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the timetable to the Partners each time it is revised. The Contractor changes
E
his programme if it is necessary to do so in order to comply with the revised 8
timetable. Each such change is a compensation event which may lead to
reduced Prices.
(8) A Partner gives advice, information and opinion to the Core Group and to
other Partners when asked to do so by the Core Group. This advice, informa
tion and opinion relates to work that another Partner is to carry out under its
Own Contract and is given fully, openly and objectively. The Partners show
contingency and risk allowances in information about costs, prices and timing
for future work.
(9) A Partner notifies the Core Group before subcontracting any work.
Incentives X12.4 (1) A Partner is paid the amount stated in the Schedule of Partners if the
target stated for a Key Performance Indicator is improved upon or achieved.
Payment of the amount is due when the target has been improved upon or
achieved and is made as part of the amount due in the Partner's Own
Contract.
( 2 ) The Client may add a Key Performance Indicator and associated payment
to the Schedule of Partners but may not delete or reduce a payment stated in
the Schedule of Partners.

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>neC 3 Engineering and construction contract
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Option X13: Performance bond
Performance bond X13
X13.1 The Contractor gives the Employer a performance bond, provided by a bank or
insurer which the Project Manager has accepted, for the amount stated in the
Contract Data and in the form set out in the Works Information. A reason for
not accepting the bank or insurer is that its commercial position is not strong
enough to carry the bond. If the bond was not given by the Contract Date, it is
given to the Employer within four weeks of the Contract Date.
Option X14: Advanced payment to the Contractor
Advanced payment X14
X14.1 The Employer makes an advanced payment to the Contractor of the amount
3$
X14.2 The advanced payment is made either within four weeks of the Contract Date
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or, if an advanced payment bond is required, within four weeks of the later of
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• the date when the Employer receives the advanced payment bond.
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The advanced payment bond is issued by a bank or insurer which the Project
Manager has accepted. A reason for not accepting the proposed bank or
insurer is that its commercial position is not strong enough to carry the bond.
The bond is for the amount of the advanced payment which the Contractor
has not repaid and is in the form set out in the Works Information. Delay in
making the advanced payment is a compensation event.
X14.3 The advanced payment is repaid to the Employer by the Contractor in instal
ments of the amount stated in the Contract Data. An instalment is included in
each amount due assessed after the period stated in the Contract Data has
£
%, passed until the advanced payment has been repaid.
£
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Option X15: Limitation of the Contractor's liability for his design to
reasonable skill and care
The Contractor's design X15
X15.1 The Contractor is not liable for Defects in the works due to his design so far
as he proves that he used reasonable skill and care to ensure that his design
complied with the Works Information.
X15.2 If the Contractor corrects a Defect for which he is not liable under this contract
it is a compensation event.

secondary Ooton causes rneC3
Option X16: Retention (not used with Option F)
Retention X16
X16.1 After the Price for Work Done to Date has reached the retention free amount,
an amount is retained in each amount due. Until the earlier of
• Completion of the whole of the works and
• the date on which the Employer takes over the whole of the works
the amount retained is the retention percentage applied to the excess of the
Price for Work Done to Date above the retention free amount.
X16.2 The amount retained is halved
• in the assessment made at Completion of the whole of the works or
• in the next assessment after the Employer has taken over the whole of <J)
the works if this is before Completion of the whole of the works.

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The amount retained remains at this amount until the Defects Certificate is
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issued. No amount is retained in the assessments made after the Defects
Certificate has been issued.
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] Option X17: Low performance damages
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Low performance X17
damages X17.1 If a Defect included in the Defects Certificate shows low performance with
respect to a p erformance level stated in the Contract Data, the Contractor
pays the amount of low performance damages stated in the Contract Data.
Option X18: Limitation of liability

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Limitation of ability
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X18.1 The Contractor's liability to the Employer for the Employer's indirect or conse
8
q uential oss is
l mited to the amount stated in the Contract Data.
li
X18.2 For any one event, the li ability of the Contractor to the Employer for loss of or
damage to the Employer's property is limited to the amount stated in the
Contract Data.
f X18.3 The Contractor's liability to the Employer for Defects due to his design which
are not listed on the Defects Certificate is limited to the amount stated in the
Contract Data.
X18.4 The Contractor's total li ability to the Employer for all matters arisin g under or
in c onnection with this contract, other th an the excluded matters, is mited to

li
the amount s tated in the Contract Data and applies in c ontract, tort or delict
and otherwise to the extent allowed under the law of the contract.
The excluded matters are amounts payable by the Contractor as stated in this
contract for
• oss of or dama g e to the Employer's

l property,
• delay damages if Option X7 applies,
• low performance damages if Option X17 applies and
• Contractor's share if Option C or Option D applies.
X18.5 The C ontractor is not li able to the Employer or a matter unless

f it is notified o
t
the Contractor before the end of liability date.

1
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Option X2O: Key Performance Indicators (not used with Option X12)
Incentives X2 0. 1 A Key Performance Indicator is an aspect of performance by the Contractor for
which a target is stated in the Incentive Schedule. The Incentive Schedule is
the incentive schedule unless later changed in accordance with this contract.
X20.2 From the starting date until the Defects Certificate has been issued, the
Contractor reports to the Project Manager his performance against each of the
Key Performance Indicators. Reports are provided at the intervals stated in
the Contract Data and include the forecast fi nal measurement against each
indicator.
X20.3 If the Contractor's forecast final measurement against a Key Performance
Indicator will not achieve the target stated in the Incentive Schedule, he
submits to the Project Manager his proposals for improving performance.
X 20.4 T he Contractor is paid the amount stated in the Incentive Schedule if the
target stated for a Key Performance Indicator is improved upon or achieved.
Payment of the amount is due when the target has been improved upon or
achieve d.
X 2 0.5 The Employer may add a Key Performance Indicator and associated payment
to the Incentive Schedule but may not delete or reduce a payment stated in
the Incentive Schedule.
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secon@arr opton cause <5neC3
OPTION Y
Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996
Definitions Y(UK)2
Y2.1 ( 1) The Act is The Housing Grants, Construction and Regeneration Act 1996.
(2) A period of time stated in days is a period calculated in accordance with
Section 116 of the Act.
Dates for payment Y2.2 The date on which a payment becomes due is seven days after the assess
ment date.
The final date for payment is fourteen days or a different period for payment if
stated in the Contract Data after the date on which payment becomes due.
The Project Manager's certific ate is the notice of payment from the Employer &
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to the Contractor pecifying
s the amount of the payment made or pro posed to 2
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be made and stating how the amount was calculated.
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Notice of Intentio n to Y2.3 If either Party intends to withhold payment of an amount due under this
%
withho d l payment contract, he notifies the other Party not later than seven days (the prescribed 0
period) before the final date for payment by stating the amount proposed to
be withheld and the reason for withholding payment. If there is more than one
reason, the amount for each reason is stated.
A Party does not withhold payment of an amount due under this contract
unless he has notified his intention to withhold payment as required by this
l contract.
Suspension of Y2.4 If the Contractor exercises his right under the Act to suspend performance, it
performance is a compensation event. 2

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I Option Y(UK)3: The Cont,acts (Rights of Third Parties) Act 1999
Third party rights Y(UK)3

j
Y3.1 A person or organisation who is not one of the Parties may enforce a term of
this contract under the Contracts (Rights of Third Parties) Act 1999 only if
the term and the person or organisation are stated in the Contract Data.
I Option Z: Additional conditions of contract
Additional conditions of Z1
I
contract Z1.1 The additional conditions of contract stated in the Contract Data are part of
this contract.
t

SCHEDULE OF COST COMPONENTS
This schedule is part of the conditions of contract only when Option C, D or E.
is used. In this schedule the Contractor means the Contractor and not his
Subcontractors. An amount is included only in one cost component and only if
it is incurred in order to Provide the Works.
People 1 The following components of the cost of
• people who are directly employed by the Contractor and whose normal
place of working is within the Working Areas and
• pecple who are directly employed by the Contractor and whose normal
place of working is not within the Working Areas but who are working in
the Working Areas.
11 Wages, salaries and amounts paid by the Contractor for people paid according
to the time worked while they are within the Working Areas.
12 Payments to people for
(a) bonuses and incentives

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(b) overtime
c •
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(c) working in special circumstances
E c: (d) special allowances

9
(e) absence due to sickness and holidays
a
0 (f) severance related to work on this contract.
13 Payments made in relation to people for
(a) travel
(b) subsistence and lodging
(c) relocation
(d) medical examinations
(e) passports and visas
( f) travel insurance
(g) items (a) to (f) for dependants
(h) protective clothing
(i) meeting the requirements of the law
(j) pensions and life assurance
(k) death benefit
(I) occupational accident benefits
(m) medical aid
( n) a vehicle
(o) safety training.
14 The following components of the cost of people who are not directly employed
by the Contractor but are paid for by him according to the time worked while
they are within the Working Areas.
Amounts paid by the Contractor.
Equipment 2 The following components of the cost of Equipment which is used within the
Working Areas (including the cost of accommodation but excluding Equipment
cost covered by the percentage for Working Areas overheads).
21 Payments for the hire or rent of Equipment not owned by
• the Contractor,
• his parent company or
• by a company with the same parent company
at the hire or rental rate multiplied by the time for which the Equipment is
required.
56 c copyright nec 2005 www.neccontract.com

scheaue or cost components <rneC3
22 Payments for Equipment which is not listed in the Contract Data but is
• owned by the Contractor,
• purchased by the Contractor under a hire purchase or lease agreement
or
• hired by the Contractor from the Contractor's parent company or from a
company with the same parent company
at open market rates, multiplied by the time for which the Equipment is
required.
23 Payments for Equipment purchased for work included in this contract listed
with a time-related on cost charge, in the Contract Data, of
• the change in value over the period for which the Equipment is required
and
• the time-related on cost charge stated in the Contract Data for the
period for which the Equipment is required.
The change in value is the difference between the purchase price and either
the sale price or the o pen market sale price at the end of he period
t fo r w hich
the Equip ment is required. nterim payments of the change

I in v alue are ma de
at each assessment date. A fi nal payment i s made in the next assessment
after the change in value has been determined.
If the Project Manager agrees, an additional item of Equipment may be
assessed as f it had been listed

i n the
i C ontract D ata.
24 Payments for special Equipment li sted in the Contract D ata. T hese amoun ts
are the rates stated i n the C ontract ata multiplied

D by the time for whi ch the
Equipment is required.
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f the Project Manager agrees, an additional item of special Equipment may
be assessed as if it had been listed in the Co ntract D ata. e%

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25 Payments for the purchase price of Equip ment which is consumed. c c
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26 Unless included in the hire or rental rates, payments f or
5
• transporting E quipment to and from the Working Areas other than for
repair and maintenance,
• erecting and d ismantling Equipment and
• constructing, fabricating or modifying Equipment as a result of a
compensation event.
27 Payments for purchase of materials used to construct or fabricate Equipment.
28 Unless included in the hire rates, the cost of operatives is included in the cost
of people.
Plant and Materials 3 The following components of the cost of lant and Materials.
P
31 Payments for
• purchasing Pl ant and Materials,
• delivery to and removal from the Working A reas,
• providing and removing packaging and
• samples and tests.
32 Cost s credited with

i payments received for disposal of Plant and Materials
I
unless the cost is disallowed.
I Charges 4 The following components of the cost of charges paid by the Contractor.
I
t 41 Payments for provision and use in the Working Areas of
I
• water,
i
4 • gas and
!
• electricity.
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neC 3 engineering an construction contract
42 Payments to public authorities and other properly constituted authorities of
charges which they are authorised to make in respect of the works.
43 Payments for
(a) cancellation charges arising from a compensation event
(b) buying or leasing land
(c) compensation for loss of crops or buildings
( d) royalties
(e) inspection certificates
(f) charges for access to the Working Areas
(g) facilities for visits to the Working Areas by Others
(h) specialist services
(i) consumables and eq uipment provided by the Contractor fo r the Project
Manager's and Supervisor's offices.
44 A charge for overhead costs incurred within the Working Areas calculated by
U
9 applying the percentage for Working Areas overheads stated in the Contract
- <fl
2 Data to the total of people items 11, 12, 13 and 14. The charge includes
) ¢
0 provision and use of equipm ent, supplies and services, but excludes accom
modation, for
(a) catering
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(b ) medical facilities and first aid
8
::, ( c) recreation
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(d) sanitation
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(e) security
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(f) copying
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(g) telephone, telex, fax, radio and CCTV
(h) surveying and setting out
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(i) computing
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(j) hand tools not powered by compressed air.

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2 c Manufacture and 5 The following components of the cost of manufacture and fabrication of Plant
? 6
fabrication and Materials which are
#
0
• wholly or partly designed specifically for the works and
• manufactured or fabricated outside the Working Areas.
51 The total of the hours w orked by employees multiplied by the hourly rates
stated in the Contract Data for the categories of employees listed.
52 An amount for overheads calculated by multiplying this total by the percen
tage for manufacturing and fabrication overheads stated in the C ontract
Data.
Design 6 The following components of the cost of design of the works and Equipment
done outside the Working A reas.
61 The total of the hours worked by employees multiplied by the hourly rates
tage for design overheads stated in the Contract Data.
63 The cost of travel to and from the Working Areas for the categories of design
employees listed in the C ontract Data.
Insurance 7 The following are deducted from cost
• the cost of events fo r w hich this contract requires the Contractor to
insure and
• other costs paid to the Contractor by insurers.
58 o copyright nec 2005 www. neccontract.com

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; SHORTER SCHEDULE OF COST COMPONENTS
l
I
This schedule is part of the conditions of contract only when Option A, B, C, D
or E is used. When Option C, D or E is used, this schedule is used by agree
ment for assessing compensation events. When Option C, D or E is used, in
this schedule the Contractor means the Contractor and not his Subcontrac
tors. An amount is included only in one cost component and only if it is
incurred in order to Provide the Works.
People 1 The following components of the cost of
place of working is within the Working Areas,

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place of working is not within the Working Areas but who are working in o z
c c
the Working Areas and c
• people who are not directly employed by the Contractor but are paid for
by him according to the time worked while they are within the Working
Areas.
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I 11 Amounts paid by the Contractor including those for meeting the requirements z
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of the law and for pension provision.
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Equipment 2 The following components of the cost of Equipment which is used within the
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Working Areas (including the cost of accommodation but excluding Equipment 0
cost covered by the percentage for people overheads).

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I 21 Amounts for Equipment which is in the published list stated in the Contract "'
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Data. These amounts are calculated by applying the percentage adjustment
for listed Equipment stated in the Contract Data to the rates in the published
o £
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list and by multiplying the resulting rate by the time for which the Equipment
8E
is required.
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l 22 Amounts for Equipment listed in the Contract Data which is not in the
j
published list stated in the Contract Data. These amounts are the rates
t stated in the Contract Data multiplied by the time for which the Equipment is
required.
I
23 The time required is expressed in hours, days, weeks or months consistently
f
with the list of items of Equipment in the Contract Data or with the published
list stated in the Contract Data.
l 24
f
Unless the item is in the published list and the rate includes the cost compo-
nent, payments for

r t
• transporting Equipment to and from the Working Areas other than for
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repair and maintenance, SE

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• erecting and dismantling Equipment and
I
• constructing, fabricating or modifying Equipment as a result of a
compensation event.
I
25 Unless the item is in the published list and the rate includes the cost compo-
I
nent, the purchase price of Equipment which is consumed.
I
26 Unless included in the rate in the published list, the cost of operatives is
included in the cost of people.
27 Amounts for Equipment which is neither in the published list stated in the
Contract Data nor listed in the Contract Data, at competitively tendered or
open market rates, multiplied by the time for which the Equipment is required.
www.neccontract.com 59
€ copyright nec 2005
»neC 3 ngneenng an construction contract
Plant and Materials 3 The following components of the cost of Plant and Materials.
31 Payments for
• purchasing Plant and Materials,
• delivery to and removal from the Working Areas,
• providing and removing packaging and
• samples and tests.
32 Cost is credited with payments received for disposal of Plant and Materials
unless the cost is disallowed.
Charges 4 The following components of the cost of charges paid by the Contractor.
41 A charge calculated by applying the percentage for people overheads stated
in the Contract Data to people item 11 to cover the costs of
• payments for the provision and use in the Working Areas of water, gas
(l) "'
(l) and electricity,
• • payments for buying or leasing land, compensation for loss of crops or
o
o c
u buildings, royalties, inspection certificates, charges for access to the
Working Areas, facilities for visits to the Working Areas by Others and
• payments for equipment, supplies and services for offices, drawing office,
laboratories, workshops, stores and compounds, labour camps, cabins,

0
d
catering, medical facilities and first aid, recreation, sanitation, security,
"' copying, telephone, telex, fax, radio, CCTV, surveying and setting out,
c
c
c
computing, and hand tools not powered by compressed air.
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0
42 Payments for cancellation charges arising from a compensation event.
a
0
43 Payments to public authorities and other properly constituted authorities of
charges which they are authorised to make in respect of the works.

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(l)
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? u 44 Consumables and equipment provided by the Contractor for the Project Man
" .!!! ager's and Supervisor's office.

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Q 5 45 Specialist services.
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Manufacture and 5 The following components of the cost of manufacture and fabrication of Plant
fabrication and Materials, which are
• wholly or partly designed specifically for the works and
• manufactured or fabricated outside the Working Areas.
51 Amounts paid by the Contractor.
Design 6 The following components of the cost of design of the works and Equipment
done outside the Working Areas.
61 The total of the hours worked by employees multiplied by the hourly rates
tage for design overheads stated in the Contract Data.
63 The cost of travel to and from the Working Areas for the categories of design
employees listed in the Contract Data.
Insurance 7 The following are deducted from cost
• costs against which this contract required the Contractor to insure and
• other costs paid to the Contractor by insurers.
' I

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I CONTRACT DATA
Part one -- Data provided by the Employer
Completion of the data in full, according to the Options chosen, is essential to
create a complete contract
Statements given in all
contracts
1 General • The conditions of contract are the core clauses and the clauses for main
O p t i o n . . . . . , dispute resolution O p ti o n . . . . . and secondary Options . . . . .
of the NEC3 Engineering and Construction Contract (June 2005).
• The works a re
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
• The Employer is
c c
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Name . . . . . . . . . . . . . . . . • . . • . . . . . . . . . • . . . . . . • . . • . . • . . . . . . • . . . . . .
E c
0
Address . . . . . . . . . . . . . . . . . . . . • . . • . . . . . . , . . . . . . . . . . . . . . . . . . . . . . •
�
0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The Project Manager is "'

e8
I Name . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . • . . • . . . • . . . . .

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c o
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Address . . . . . • . . • . . . • . . . . • . . . . . . . . . . . . • . . . . . . • . . . . . . . . . • . . . . . . Q 5
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " .
a
0
• The Supervisor is
I
Name . . . . . . . . . . . • . . . . . . . . • . . . . . . • . . . . . . • . . • . . • . . . • • . . . • • • • . • •
-"'
c
Address . . . . . . . . . . . . • . . • . . • . . • . . . . . . . . . • . . . . . . . . . . . . • . . . . . . . . .
• c
O 0
0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £
8
• The Adjudicator is
Name . . . . . . . . . . . . . . . • . . • . . • . . • . . . . . . • . . . . . . • . . • . . • • . . . . • . • . • •
Address . . . • . . . . . . • . . . . . . . • . . . • . . . . . . . . . • . . • • . . . . . . . . • . . • . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The Wo rks I nformation is in
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The S ite I nformation is n

i
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . " ' .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .
.neccontract.com
www
i
• The boundaries of the site a r e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,
• The language of this contract is . . . . . . . . . . . . • . . • . . . . . . . . . . . . . . . . . . . .
• The law of the contract is the law of . . . . . . . . . . . . • . . . . . • . . • . . . . . . . . . . .
• The period for reply is . . . . . . . . . . . . . . . . • . . • . . • . . . . . . . . . . . . . . . weeks.
• The Adjudicator nominating body is . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . .
• The tribunal is . . . . . . . . . . . . . . . . . . . . . • . . • . . . . . . • . . • . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' .
• The following matters will be included in the Risk Register
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . " .
0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " .
<D <D
, G
o z
0 c
3 Time • The starting date is . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . .
u
• The access dates are
Part of the Site Date
1 .
2 . . .
3 .. . .
• The Contractor submits revised programmes at intervals no longer than
<Ii
.. . . . . . .. . . .. . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . weeks.
c_
e8
'O.!!1 4 Testing and Defects
c o • The defects date is . . . . . weeks after Completion of the whole of the works.
g c
Q2 5
• The defect correction period is weeks except that
5
o • The defect correction period for is . . . . . . . . . . . . weeks
• The defect correction period for . . . . . . . . . . . . is . . . . . • . . . . . . . weeks.
2
% Q 5 Payment • The currency of this contract is the .
£
~ Q
0
• The assessment interval is weeks (not more than five).
£
8 • The interest rate is • . . . . % p e r annum ( not less than 2} above the . . . . . .
rate of the . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . • . . . . . . . . . . . . . . . . bank.
62 o copyright nec 2005

www.neccontract.com
contract oata r a n , <nec3
r
I
6 Compensation events
• The place where weather is to be recorded is
I
! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' .
• The weather measurements to be recorded for each calendar month are
l • the cumulative rainfall (mm)
• the number of days with rainfall more than 5 mm

I • the number of days with minimum air temperature less than O degrees
Celsius
• the number of days with snow lying at . . . . . . . . . . . . . . . . . . hours GMT
• and these measurements:
. . . . . " ' .
. . . . . . . . . . ' ' " .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' ' - .
l
• The weather measurements are supplied by .
i
I
• The weather data are the records of past weather measurements for each
l
l
! calendar month which were recorded at .
I and which are available from . • . . . . . . . . . . . . . • . . • . . . . . • . . . . . . • . . . . . .

U
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"
8
:,
c c
I Where no recorded data are available · co o
E c
l 0
• Assumed values for the ten year return weather data for each weather
measurement for each calendar month are

a
0
I
. . . . . . . . . . . . . . . . . . " .
U
. . . . . . . . . . . . . . . . . . . . . . . . . . " . s 8
I
cs £
d
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c o
!
g c
g 5
' . . . . . . . . . . . . . . . . . . . . . " . d .
"' 15.
0
8 Risks and insurance • The minimum limit of indemnity for insurance in respect of loss of or
damage to property (except the works, Plant and Materials and Equipment)
and liability for bodily injury to or death of a person (not an employee of the _
2
Contractor) caused by activity in connection with this contract for any one - Q)
I event is O 0
€ 0
£
. " ' ' ' .
8
I
• The minimum limit of indemnity for insurance in respect of death of or
bodily injury to employees of the Contractor arising out of and in the course
of their employment in connection with this contract for any one event is
. . . . . . " ' ' ' .
I
Optional statements If the tribunal is arbitration
• The arbitration procedure is . . . . . . . . . . . . . . . . . . . . • . . . . . • . . . • . . . . . . . .

I
• The place where arbitration is to be held is
I
' ' ' ' .
• The person or organisation who will choose an arbitrator
• if the Parties cannot agree a choice or
• if the arbitration procedure does not state who selects an arbitrator is
. . . . . . . . . . " ' ' ' ' .
+
pwww.neccontract.com copyright nec 2005 63
l
»neC 3 engineering and construction contract
If the Employer has decided the completion date tor the whole of the works
• The completion date tor the whole of the works is .
If the Employer is not willing to take over the works before the Completion
Date
• The Employer is not willing to take over the works before the Completion
Date.
If no programme is identified in part two of the Contract Data
• The Contractor is to submit a first programme for acceptance within . . . . . • .
weeks of the Contract Date.
If the Employer has identified work which is to meet a stated condition by a
key date
• The key dates and conditions to be met are
condition to be met key date
1 . " •'• .
0 2
3l
::, 3 . . . . . . . . . . . • . . . . . . . . . . . . .
«
·mo
E c If the period in which payments are made is not three weeks and Y(UK)2 is
0
not used
8
0
• The period within which payments are made is .
"'
e8
c_ If Y(UK)2 is used and the final date for payment is not 14 days after the date
when payment is due

0
c c
g
• The period for payment is . . . . . . . . . . . . . . . . . . . . . . . . • . . . • . . • . . • . . . . . .
Q 5
0 •
a
0 If there are additional compensation events
• These are additional compensation events
2 1 .
� (I)
£
0 0 2 . . . . . . . . . . . . . • . . • . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . .
0 a.
E
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . .
8
If there are additional Employer's risks
• These are additional Employer's risks
1 .
2 .
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . • . . • . . • . . • . . . • . .
If the Employer is to provide Plant and Materials
• The insurance against loss of or damage to the works, Plant and Materials
is to include cover for Plant and Materials provided by the Employer for an
amount of
. . . . . . . . . . . . . . . . . . . . . . . . . .
64 o copyright nec 2005

www.neccontract.com
contact oata P a n , <nec3
If the Employer Is to provide any of the Insurances stated in the Insurance
Table
• The Employer provides these insurances from the Insurance Table
1. Insurance against. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . •
Cover/indemnity is . . . . . . • . • • . . • . . . . . • . . • . . . . . . . . . . • . . . . . . . . . . . . .
The deductibles are . . . . . • . . . . . • . . • . . . . . . . . . • . . . • . . • . . . • . . . . . . . • . .
2. Insurance against. . . . . . . . . . • . . • . . • . . . . . . . . . • . . • . . . • . . • . . . . . . . .
Cover /indemnity is . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . .
The deductibles are . . . . . . . • . . . . . . . . • . . • . . . . . . • . . • . . . • . . • . . • . . • . . •
3. Insurance against. . . . • . . . • . . • . . . . . . . . . • . . • . . . . . . • . . . . . . . • . . . • .
Cover/indemnity is . . . . . . . . • . . . . . . . . . . . . . . . • . . • . . . • . . • • . . • . . • . . . .
The deductibles are . . . . . . . . . . . . . . . . . . . . . . . • . . • . . . • . . . • . . . . . • . . • . .
If additional insurances are to be provided
• The Employer provides these additional insurances
U)
1. Insurance against. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . • . . • . . • • . . .
$
Cover/indemnity is . . . . . • . . • . . • . . • . . . • . . • . . . . . . . . . . . . . . . • . . . . . . . .
c c
v
The deductibles are . . . . . • . . . . . . . . . . . • . . . . . • . . . . . . • . . . . . . . . . • . . • . .
E e
0
2. Insurance against . . . . . . • . . • . . • . . . . . • . . . . . . • . . • . . . . . . • . . . . . . • . .
a
0
Cover /indemnity is . . . . . . . . . • . . . . . . • . . • . . • . . . • . . • . . • . . . • . . • . . • . . .
U)
0
The deductibles are . . . . . . . . . • . . . . . • . . • . . • . . . • . . • . . . . . . • . . . . . • . . . .
e a
3. Insurance against . . . . . . . . . . . . . . . . . . . . . . . • . . . • . . . . • . . . • . . • . . . • .
cs
£
c o
g c
Cover/indemnity is . . . . . • . . . . . • . . . . . . . . • . . . . . • . . • • . . • . . . • . . • . . • . . Q 6
0 .
The deductibles are .

a
0
• The Contractor provides these additional insurances
en
1. Insurance against. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . •
c
%, g
s
Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . • . . • . . . . . . . . . . . . . • . . . . . . .
Q
o
2. Insurance against . . . . • . . • . . • . . • . . . . . • . . . . . . • . . • • . • . . . . . . • . . • . . E
0
0
Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . • . . • . . • . . . • . . • . . • . . • . . .
3. Insurance against. . . . . . . . . . . . . . • . . • . . . • . . • . . . • . . • . . • . . . • . . . . • .
Cover/indemnity is . . . . . . • . . . . . . • . . . . • • . . . . . . . . . . . . . . . . . . . . . . . . . .
If Option B or D Is used
• The method of measurement is
amended as follows . . . . . . . . . . . . . . . • . . . . . . • . . • . . • . . . • . . • . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
,
.
'

»>neC 3 engineering an construction contract
If Option C or D Is used
• The Contractor's share percentages and the share ranges are
share range Contractor's share percentage
less than % . . . . . . . . . . . . . . . . . . . . . . . . . . . %
from %to % . . . . • . . • . . • . . . . . . . . . . . . . . . • %
from %to . . . . • . . . . % ,. . • . . • • . . . . . • . . . . . . . . . . . . . %
greater than %
· · · · · · · · · · · · · · · · · · · · · · · · · · · % .
If Option C, D, E or F Is used
• The Contractor prepares forecasts of Defined Cost for the works at intervals
no longer than weeks.
• The exchange rates are those published in . . . . . . . . . . . . . . • . • . • . . . . . . . . . .
on (date).
If Option X1 is used
<I)
• The proportions used to calculate the Price Adjustment Factor are
$
0 linked to the index for . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . • .
z •
«
5 0 .
-
- c
0
0. . . . . . . . . . •
5 0. . . . . . . • • • •
<I)
0. . . . . . • . . . .
$

2 6 0 .

0
? c 0...........non-adjustable
? 5
) .
' %
0
1.00
• The base date for indices is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . • . • . . . . .
£ • The indices are those prepared by . . . . . . . . . • . . . • . . . • . . . . . . . . . . . . . . • . . .

,
i ¢
) 0
) a. If Option X3 Is used
E
• The Employer will pay for the items or activities listed below in the currencies
8
stated
items and activities other currency total maximum payment
in the currency
• The exchange rates are those published in . . . . • . . • . . . . . • . . • . . . . . . . . . .
on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . • . . • . . • . . . . . . . (date).

I contract oata r a n , <neC3
I
i
I
• The completion date for each section of the works is
i section description completion date
2 . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 . . . . . . . . . . . . . . .
4 . . . . . . . . . . . . . . . . . . . . . . . . . . .
If Options X5 and X6 are used together
• The bonus for each section of the works is
section description amount per day
1
I . . . . . . . . . . . . . . . . . . . . . . . . .
2 . . . . . . . . . " ' .
I
3
i 4 . . . . . . . . . . . . . . . . . . ' .
"'
c
!!l
I Remainder of the works . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . • . . . . . •
c @
%
l If Options XS and X7 are used together E c
I C
+
• Delay damages for each section of the works are E
C
'
j
section description amount per day
l
•
(l;
f 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
e

l 2 . . . . . . . . . . . . . . . . . . . . . . . . . .
d
i c c
g e
j 3 . . . . . . . . . . . . . . . . . . . . . . . . . £ a
. . . . . . . . . . . . . . . . . . . . . . . . . .
0 .
<\
(/) c
' 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
I
'
'
Remainder of the works . . . . . • . . . . . . . . . • . . . . . . . . . . . . . . • . • . . . . . • . • .
t u
t
l
%
If Option X6 is used (but not If Option XS is also used) £
t
O C
c
• The bonus for the whole of the works is per day.
£
I
£
If Option X7 is used (but not if Option XS Is also used)
• Delay damages for Completion of the whole of the works are per day.
l
I
• The Client is
Name . . . . . . . . . • . . . . . . . . . . . • . . • . . . . . . . . . . . . . • . • • • • • • · · · · · · • · · ·
Address . . . • . . • . . . . . • . . . . . • . . . . . . • . . . . . . • . . • . . . • . . . . . . . . . . . . . •
I
. ' .
• The Client's objective is
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . ' .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

neC 3 cngneerng and construction contract
• The Partnering Information is in
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . " .
• The amount of the performance bond is
• The amount of the advanced payment is .
• The Contractor repays the instalments in assessments starting not less
than . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weeks after the Contract Date.
• The instalments are . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . " . . " .
(either an amount or a percentage of the payment otherwise due)

<J)
8 • An advanced payment bond is/is not required.

2
z c0
c If Option X16 is used
-
- c
0
• The retention free amount is . . . . . . . . . . • . . . . . • . . • . . • . . . . . . . . . • . . . . . .
a
0
• The retention percentage is . . . . . . • . . . . . . . . . . . . . . . • . . • . . . . . . . . . . . %.
• The amounts for low performance damages are
amount performance level
for . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . • . . . . . . . . .
for . . . . • . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for . . . . • . . . . . • . . • . . . . . . . . • . . . . . . • . . • . . . . . . . . . .
£
0
£
g for . . . . . . . • . . • . . • . . • . . • . . • . . • . . • . . . • . . • . . • . . • .
a
£
8
• The Contractor's liability to the Employer for indirect or consequential loss is
limited to .
• For any one event, the Contractor's liability to the Employer for loss of or
damage to the Employer's property is limited t o . . . . . · . . . » · . . . . . . . . . ·
• The Contractor's liability for Defects due to his design which are not listed
on the Defects Certificate is limited to .
• The Contractor's total liability to the Employer for all matters arising
under or in connection with this contract, other than excluded matters,
is limited to .
• The end of liability date is . . . . . . • . . . . . years after the Completion of the
whole of the works.
I
f Option X2O is used (but not if Option X12 Is also used)
• The incentive schedule for Key Performance Indicators is in . . . . . . . . • . . . . .
• A report of performance against each Key Performance Indicator is provided
at intervals of months.

contract oata a n , -rneC3
If Option Y(UK)3 is used
• term • person or
organisation
If Option Z Is used
• The additional conditions of contract are
V
d
[
c «
·
ro c;
E e
c
i
c
V
d
e
c0
-0l':
c c
g c
85
"' 1:
c
V
�
c
• £
O C
<.> C
£
£
i
Part two -- Data provided by the Contractor
Completion of the data in full, according to the Options chosen, is essential
to create a complete contract.
Statements given In all • The Contractor is
contracts
Name . . . . . . . . . . . . • . . • . . . . . • . . . . . . . . • - . • • • • • • • • • • • • • • · • • • • • • • •
Address . . . . . . . . . . . . . . . . • . . • . . • . . • . . • . . . . . . . . . . . . . . . . . . • . . . • . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The direct fee percentage is . . . . . . . . . . . . . . • . . . . . . • . . • . . • . . • . . . . . . %.
• The subcontracted fee percentage is . . . . . • . . • . • . . . . . • . . . • . . • . . . . . . %.
• The working areas are the Site and . . . . . . . . . . . . . . . . . . • . . • . . . . . . . . . . .
• The key people are
( 1) Name . . . . . . . . . . . . . . . . . . . . . • . . • . • • . . . . . • . . • . . . . . . . . . . . . . . . . •
g
u Job . . . . . . . . . . . . . . . . . . . . • . . • . . . . . . . . • . . • . . . . . . . . • . . • . . • . . . • . . . •
2
z «
ij c3 Responsibilities . . . . . . . . . . . . . . . . . . . . . . • . . . . • . . . . . . . . . . . . • . . . • . . . .
- c
6
z
0 Qualifications . . . • . . . . . . • . . • . • • . . • . . . . • . . • . . • • . . • . . . . . • . . . • . . . . .
Experience . . . . . . • . . • . . . . . . . . • . . • . . . . . . . . • • . . . . • . . . • . . • . . • • . . • • .
3
q

g
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
z o (2) Name . . . . . . • . . . . . . . . . . . . • . . . . . • . . . . . . . . . . . . . . . . . . . . . • . . . . . .
3 g
.9
Job . . . . . . . . . . . . • . • . . . . . • . . • . . . . . . . . • . . • . • • . . . . . . . . . • . . • . . . . . . .
» a
0
Responsibilities . . . . • . . • . . • . . • . . • . . • . . • . . . . . . . . . . . . . . . . . • . . . • . . . •
l!l
c
Qualifications . . . . . • . • • . . . . . . . . • . . • . . . . . . . . • . . • . . • . . . . . . . . . . . . . . .
J "'
£
5 g
3 0 Experience . . . . . . . • . . • . . . . . . . . . . . . . . . . . . . . • . • . . • . . • . . . • . . . . . . . • .
£
0
0
• The following matters will be included in the Risk Register
Optional statements If the Contractor is to provide Works Information for his design
• The Works Information for the Contractor's design is in
70 0 copyright nec 2005 www.neccontract.com

contact oata P a n 2 <"neC3
If a programme is to be Identified In the Contract Data
• The programme identified in the Contract Data is • • • • • • •
If the Contractor is to decide the completion date for the whole of the works
• The completion date for the whole of the works is .
If Option A or C Is used
!
• The activity schedule is . . . . · . . . . . . . . . . . • . . . . . . . . . . . . . . . . . • . . . . .
!
'
!
If Option B or D Is used
l • The bill of quantities is . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . • . . • . . . • . .
If Option A, B, C or D is used
• The tendered total of the Prices is . . . . . . • . . . . . • . . . . . . . . . . . . . . . . . . . . .
I
If Option F is used
• Work which the Contractor will do himself is

I
activity price (lump sum or unit rate} U

0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' . "'
c c
I
·ro

u
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E e
0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E
0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VJ
If Option A or B is used e%
"0 �
C

O
Data for the Shorter • The percentage for people overheads is . . . . . • . . . . . . . . . . . . . . . . . . . . . . %.
g e
g 6
Schedule of Cost
Components
• The published list of Equipment is the last edition of the list published by
;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The percentage for adjustment for Equipment in the published list is

2
c
. . . . . . . • . . . . . . . . . . . . . • . . . . . . . . • • . . . . . . . . . . % (state plus or minus}.
.,, c
%
O 0
• The rates for other Equipment are
a
E
Equipment
size or capacity rate
8
. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
t
l
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• The hourly rates for Defined Cost of desi gn out side the Working Areas are
category of employee hourly rate

+
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . ' . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• T he percentage for design overheads i s . . . . . . • . . • . . . • . . . . . • . . . • . . . . %.
t copyright nec 2005 71

www.neccontract.com
u00')0./100000U'MMM Go0 00u 1uuKd0 •
9 ' · · . . . . . . . . . . . . . . . . . . . . . · · · s speauao uBisop o a~euao±ad u] •
ae nou oaf0duo ,o A08oe
suauodu10o 1s0o
ore seary BupyoM au) apysno u8sap 0 1s0 p9uog 10) sae nou uL • Jo sanpouos uoq 1o] ee(
posn st 3 0 g ' uopdO JL
9 · · . . . . · · · s s p e a u a o uoneouqe pue amnoejnueu Jo oBeuoorod au] •
ae pnou oaopdua Jo A0Ba0o
are sear BupyoM au
opysno uopeoqe] pue amnoejnueu Jo 1s0 pauyog Jo] sae ApnOu auL •
' · . . . . . . . . . . . . . . · · · sispeouao seamy BupyoM ioJ a8euaorad au •
ae Ayodeo o ozys uoudnb3
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pasn st 3 0 q ' u0pd0 JI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ae 1s0 pauu@ u pepnpour are seay BupIoM au]
uuoI] pue o) ssu odxo Buyyoen sou sooojduro uBysop jo sou03a00 au] •
oenuoo uononnsuoo pue 8uaauau3 gU_¢=

«
r Contract Data Part 2
I
• The categories of design employees whose travelling expenses to and
from the Working Areas are included as a cost of design of the works and
Equipment done outside of the Working Areas are
' . . . . . . . . . . . . . . . . . . . . . . . . ' ' .
l
. . . . . . . . . . . . . . . . . . . . . . . . ' ' ' .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I If Option C, D or E is used
I
Data for the Shorter • The percentage for people overheads is %.
Schedule of Cost
• The published list of Equipment is the last edition of the list published by
I Components
f • The percentage for adjustment for Equipment in the published list is
% (state plus or m i n u s ) .
• The rates for other Eq uipment are
I Equipment size or capacity rate

u
t "'
0
2
C c
c
J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
' . . . . . . . . .
E c
t 0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R
1 0
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. . . . . . . . ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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-
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} www.neccontract.com e copyright nec 2005 73
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-
»> n€C 3 Engineering and Construction Contract
Index by clause numbers (Option clauses indicated by their letters, main clause heads by bold numbers).
Terms in italics are identified in Contract Data, and defined terms have capital initial letters.
acceleration 36, A36.3, B36.3, C36.3, D36.3, E36.4, Acts
F36.4 Contracts ( Rights of Third Parties) ( 1 9 9 9 ) Y(UK)3
compensation events 60.1(9) Housing Grants, C onstruction and Regeneration
Key Date 36.1 (1996) W1, W2, Y(UK)2
quotations 36.1, B 1 1. 2 ( 2 1 ) , D 1 1 . 2 ( 2 1 ) additional conditions of contract Z1
acceptance adjudication
addition to Working Areas 15.1 dispute resolution W 1 . 3 ( 1 - 1 1 ) , w 2 . 3 ( 1 - 1 2 )
conditions of subcontract 26.3 timings W1.3(8), W 1 . 3 ( 1 1 ) , W 2 . 3 ( 2 ) ( 8 ) ( 1 1 - 1 2 )
contract data for subcontract C26.4, D26.4, E26.4, Adjudication Table W1.3( 1)
F26.4 Adjudicator
Contractor's communication 13.4, 13.8, 14.1 decisions 51.3
Contractor's design 21.2, 21.3 dispute resolution W1.2(1-5), W 2 . 2 ( 1 - 5 )
Defects 44, 6 0 . 1 ( 1 ) ( 9 ) nominating body W1.2(3), W2.2(3)
Equipment design 23.1 not arbitrator W 1 . 2 ( 2 ) , W2.2(2)
form of communication 13.1 replacement W1.2(4), W2.2(4)
insurance policies/certificates 85.1, 87.1 , 87.2

resignation of W 1 . 2 ( 3 )
programme (frst/revised) 31.3, 32.2, 50.3,

tribunal W 1. 3 ( 2 ) ( 1 0 ) , W 2 . 3 ( 1 1 )
64.1-2, A31.4, A36.3 , B36.3, C31.4 , C 36.3 , tribunal reviews W 1 . 4 ( 1 -- 4 ) ( 6 ) , W2.4(1-3)
036.3
administration order 9 1.1
quot ations 44.2, 60.1(9), 62.3, 65.1, A36.3, advanced payment 93.1, X14.1-3
A65.4, B36 .3, C 36 .3, D36.3 , E36.4 , F36.4 repayment X 14.3
reasons for w ithholding 13.4, 13.8, 15.1, 2 1. 2 , advanced payment bond X14.2
2 3 . 1, 24.1, 26.2-3, 31.3, 60.1(9), 85.1,

advanced payment(s) 93.1, X14.1-3
87.1, A54.3, C 26.4, D 26.4 , E26.4, F26.4,

agents of Adjudicator W1.2(5), W2.2(5)
X13.1
agreement, Parties/Party 12.4
replacement Contractor's employee 24.1 ambiguities 17, 60.3, 63.8, B60.6, D60.6
subcontract conditions 26.3 amount due
Subcontractor 26.2, 91.2

adjustment for inflation X 1.1 ( b), X 1 . 2, X 1.4, X 1.5
acceptance procedure C11.2(25), D11.2(25)

and advanced payment repayment 93.1, X14.3
E1 1 . 2 ( 25 ) assessing 50, 51.1, 51.3, 90.4, 93.1, C50.6,
W orks nformation F11.2(26)

I
C 5 3 . 3- 4 , D50.6, E 5 0 .7, F 5 0. 7, X 1.1(b), X1.2,
Accepted Programme 62.2 X 1 .4
absence 64.2 Contractor's share D53. 7-8
and Activity Schedule A54.2, A54.3, C54.2, C54.3 correction of assessment 50.5, 51.3, X1.2
changes 32.1, 63.7 definition 50.2
dates/times 33.1, 6 0. 1 ( 2 ) ( 3 ) ( 5 ) , 63.3 payment 51.1, 51.3
definition 1 1. 2 ( 1 ) retention in 93.1, X16.1
prevention 19.1, 60.1(19) on termination 90.2, 90.4, 93.1, 93.2, A93.3
termination 9 1. 7 amount retained 5 0 . 3 , X 1 6 . 1 , X 1 6 . 2
see also programme applicable law 1 1 . 2 ( 5 ) , 21.2, 23.1, 84.2
access 27.2 , 43.4 tests and inspections 40.1
to S ite 31.2 approval from Others, Contractor's design 27.1
and use of Site 33

arbitration procedure W1.4(5), W2.4(4)
access date 30.1, 31.2 arrangement with creditors 9 1.1
S ite 33.1 assessment
accounts and records, Contractor's C 1 1 . 2 ( 2 5 ) , C52.2, Adjudicator W1.3(7), W2.3(7)
C 5 2 . 3 , D 1 1 . 2 ( 25) , D 52.2-3, E 1 1 . 2 ( 2 5 ) , E52 . 2, amount due 50, 51.1, 51.3, 90.4, 93.1, 050.6,
E52.3, F11.2(26), F52.2, F52.3 C5 3.3, C53.4, D 50.6, D53.7, D53.8, E50 .7,
actions 10, 11.2(13,14), 14.2, 16.3, X12.2 F50.7, X1.1(0), X1.2, X 1. 4 , X 1. 5
activity schedule A11.2(20), C 1 1 . 2 ( 2 0 ) compensation events 62.2-3, 63, 64, 65.1-2,
Activity Schedule A11.2(20,30), A31.4, A54.1-3, A63.10, A63 . 1 2 , A65.4, 863.10-13, €52.2,
A6 3.1 2 , C 1 1 . 2 ( 2 0 )( 3 0 ) , C31.4, C54.1-3, c63.11-12,€63.15, 0 1 1. 2 ( 2 5 ) , 052.2,
0 6 3. 1 3 , 0 6 3. 1 5 , E11.2(25), E52.2, £63.15,

c63.12
revised A54.2, A54.3, C54.2, C54.3 F52.2, X 1. 3
74 o copyright nec 2005 www. neccontract.com

res -nec3
Contractor's share C53.1, C53.3-4, C93.4, €93.6, address to w hich sent 13.2
D53.5, 0 5 3 . 7 - 8 , 093.5-6 Adjudicator W1.3(6), W2.3(6)
Defect(s) correction cost 45.2 assessment of compensation events fo r
interest 51.2, 51.3 Subcontractors C52.2, D52.2, E 5 2. 2 , F52.2
tests/inspections cost 40.6 certificate(s) 13.6
assessment date 50.1, 50.4, 5 1. 1 - 2 , C 1 1. 2 ( 2 9 ) , form defined 13.1
D 1 1. 2 ( 2 9 ) , £ 1 1. 2 ( 2 9 ) , F 1 1 . 2 ( 2 9 ) , X 7 . 2 , Y 2. 2 l a n g u a g e for 13.1
assessment interval 50.1 notification(s) 13. 7
assignment of benefit 92.2 period for reply 13.3, 13.5
availability of resources C 1 1 . 2 ( 2 5 ) , 0 1 1 . 2 ( 2 5 ) , receipt of 1 3. 2
E11.2(25) t i m e allowed for reply 13.3, 13.5, 31.3, 32.2,
60.1(6)
bank bonds X 1 3 . 1 , X14.2 tim e when effecti ve 1 3 . 2
bankruptcy 91 . 1 compensation
base date X 1 . 1 ( a ) , X 1 . 3 Employer's risk 80.1
Base Date Index X1.1(a) see also indemnity
bill of quantities B 1 1. 2 ( 2 1 ) , 0 1 1 . 2 ( 2 1 ) compensation events 60
Bill of Quantities B 1 1 . 2 ( 2 1 ) ( 2 8 ) ( 3 1 ) , 855.1, amount due affected by 5 1 . 3
B 6 0 . 4 - 7 , 863.13, 0 1 1 . 2 ( 2 1 ) ( 3 1 ) ( 3 3 ) , 055.1, assessing 6 2 . 2 - 3 , 63, 64, 6 5 . 1 - 2 , A63.10,
060.4- 7, 063.13 A63.12, A65.4, 8 6 3 . 1 0 -- 1 3 , €52.2,
binding decisions, Adjudicator W1.3(10), W 2 . 3 ( 1 1 ) €63.11-12, 063.15, D 1 1 . 2 ( 2 5 ) , 052.2,
bodily injury 84.2 063.13, 063.15, E 1 1 . 2 ( 2 5 ) , E52.2, £63.15,
bond(s) 91.2, X13.1, X14.2 F 5 2. 2 , X 1. 3
bonus for early Completion X6 assumptions made 6 0 . 1 ( 1 7 ) , 61.6, 63.7, 65.2
boundaries of the site 1 1 . 2 ( 1 5 ) Completion Date affected by 62.2, A65.4, B65.4,
breach of contract 60.1(18) C65.4, 065.4
breach of statutory duty 80.1 Completion Date notification 61.3
Contractor 6 0 . 1 ( 1 ) ( 8 ) ( 1 0 ) ( 1 2 ) ( 1 9 ) , 60.2, 60.3,
calculations, assessment of compensation events for 61.1-6,F20.5
Subcontractors C52.2, D52.2, £52.2, F52.2 and Defined Cost 61.4
certificate( s) /certification definitions 13.8, 60.1, B60.4-7, D60.4-060.7,
communication of 13.1, 13.6 X 2. 1 , X 1 4. 2
Completion 30.2, 35.2 implementing 32.1, 65, A65.4, 865.4, C65.4,
Defects 43.3, 50.1 D65.4, E65.3, F65.3
payment 50.5, 51.1-3, 90.4, 91.4 Key Dates affected by 60.1(4), 61.3, 62.2, A65.4,
take-over date 35.3, 6 0 . 1 ( 1 5 ) 860.5, B65.4, C65.4, 060.5, D65.4
termination 90.1, 90.3, 90.5, C93.4, D93.5 notifying 61, X2.1
changed Completion Date X7.2 payment to Subcontractor D 1 1 . 2 ( 2 5 ) , C 1 1. 2 ( 2 5 ) ,
changed decision(s) 6 0 . 1 ( 8 ) , 61.1-3 E11.2(25), F 1 1. 2 2 6 )
change(s) in Activity Schedule A54.2, A63.12, C54.2, performance suspension Y2.4
C63.12 Prices affected by 62.2, 63.1, A63.10, A65.4,
change(s) in forecast Prices, Completion Date and 860.6, 863.10, 865.4, C65.4, D60.4, D60.6,
Key Dates due to compensation events E65.3, D63.13, 0 6 5 . 4 , X 2. 1
F65.3 Prices not affected by 61.4
change(s) in the law X2 Project Manager's assessments 64, A63.10, A65.4,
change(s) of Prices, Completion Date and Key Dates 863.10, C63.15, D63.15, E63.15
d ue to compensation events A65.4, B65.4, quotations 61.4, 61.5, 62, 64.1, 64.3-4, 65.1,
C65.4, D65.4 A 1 1 . 2 ( 2 2 ) , 8 1 1 . 2 ( 2 2 ) 0 1 1. 2 ( 2 5 ) ,
change(s) of Prices due to compensation events 62.2, 0 1 1. 2 ( 2 5 ) , E 1 1 . 2 ( 2 5 ) , F 1 1 . 2 ( 2 6 ) , X 2. 1
63.1, A63.12, 860.6, 863.13, € 6 3. 1 1 , D60.6, completed activities A 1 1 . 2 ( 2 7 )
063.13 completed work, definition B 1 1 . 2 ( 2 8 )
change(s) in Works Information 14.3, 18.1, 44.1, Completion 30
44.2, 60.1(1), 6 3. 8 - 9 acceleration of 3 6 . 1
civil commotion/war risks 80.1 bonus paid if early X6.1
claims certification of 30.2, 35.2
Employer's risk 80.1 and compensation events 6 1 .4 , B60.5, 060.5
indemnity against 83.1, 83.2 decision on date 30.2
co-operation at risk reduction meeting 16.3 definition 1 1 . 2 ( 2 )
co-operation with Others 2 5 . 1 -- 3 early w arning of possible delay 1 6 . 1
co-operation and trust 1 0 . 1, 2 6. 3 , X12.3(1) Key Date 16.1
communications 13 and programme 31.2, 32.2
and acceptance of submission 13.4, 13.8, 14.1 section of the works X5.1
I
>neC 3 cngneenng and construction contract
Completion (continued)
Contract Date 1 1 . 2 ( 4 ) , 860.4, 060.4, X2.1, X4.1,
and take over of works 35.1-2, 35.3, 6 0 . 1 ( 1 5 ) , X13.1, X14.2
X16.1, X16.2 A ccepted Programme 6 0 . 1 ( 1 9 )
whole of works 32.2, 50.1, 60.1( 13), 92.1, 93.2, compensation events 6 0 . 1 ( 1 2 ) ( 1 9 )
C20.4, C53.3, D20.4, D53.7, E20.4, F20.4, prevention 19.1
X1.2, X16.1 termination 91.7
work necessary 1 1 . 2 ( 2 ) ( 1 3 ) Contractor
Completion Date ( completion date) acceleration 36.1, 36.2

accelerated programme 36.1, A36.3, B36.3, C36.3, acceptance of communication /proposal/submission
D36.3, E36.4, F36.4 13.4, 13.8, 14.1, 15.1, 21.2, 87.2
change to later date X7 .2 access 27.2, 43.4
and compensation events 6 0 . 1 ( 1 3 ) ( 1 5 ) , 61.4, access and se of Site 33.1
u
62.2, 63.3, A65.4, 865.4, C65.4, D65.4, accounts and records C 1 1 . 2 ( 2 5 ) , C52.2- 3 ,
E65.3, F65.3 0 1 1. 2 ( 2 5 ) , 052.2-3, £ 1 1. 2 ( 2 5 ) , £52.2,
definition 11.2(3)
£52.3, F 1 1 . 2 ( 2 6 ) , F52.2, F52.3
f Defect(s)
i accepted 44.2 actions 10.1
notification of com p ensa ti on events 61.3
Activity Schedule A31.4, A54.2, C31.4, 054.2
P rice Adjustment Fa ctor calculation X1.2 adding to working areas 15.1
in programme (first/revised) 31.2, 36.1, A36.3, adjudication W 1. 3 ( 1 - 2 ) ( 4 ) , W 2 . 3 ( 3 ) ( 7 )
8 36.3 , C36.3, D36.3 advanced payment X14.1, X14.3
rights to change 63.4
advice to Project Manager C20.3, D20.3, E20.3,
section of the works X5.1 F20.3
and take over of works 35.1-2, 60.1(15)
and ambiguities/inconsistencies 1 7 . 1
and weather measurement 6 0 . 1 ( 1 3 )
amount due to e
b p aid to 50.2, 50.4, 5 1. 1
work to b e done by 1 1. 2 ( 2 ) , 30.1
assessment of compensation events 62.2, 64.1,
C ondition 11.2(9), 25.3, 30.3, 3 1. 2 , 63.3, 63.9,
863.13, C63.15, D63.13, D63.15, E63.15
860.5, D60.5
Bill of Quantities 8 1 1. 2 ( 2 8 ) , 863.13, 063.13
conditions, i dentified and defined rms 1 1 . 2 ( 9 )
te
certificates ssued to 13.6
i
conditions of contract co-operation 10.1, 25.1-3

identified a nd defined terms 11.1
compensation events 6 0 . 1 ( 1 ) ( 8 ) ( 1 0 ) ( 1 2 ) ( 1 9 ) ,
for Sub contract 26.3 60.2, 60.3, 61.1-6, F20.5
conditions of contract
costs 52.1, C40.7, D40.7
additional Z1.1
decisions communicated to 30.2, 50.1, 60.1(8)
interpretation 12.3 default(s) 91.2, 91.3, 91.6
and sectional Completion X5.1 Defect(s) 1 1 . 2 ( 5 ) , 42.2
Contract Data/contract data
Defect(s) acceptance/non-correction 44.1, 44.2
addresses for communications 13.2
Defect(s) correction 1 1. 2 ( 2 ) ( 6 ) , 43.1-2, 43.4,
Adjudicator identified W1.2(3), W2.2(3)
45.1-2, 0 1 1 . 2 ( 2 5 ) , 0 1 1. 2 ( 2 5 ) , £ 1 1. 2 ( 2 5 )
conditions of contract Z1.1 delay damages X7.1
conditions of contract 11.1
delivery of Plant and Materials 41.1, 93.1
currencies for payment X3.1, X3.2 early Completion b onus X6.1
delay damages X7.1
early warning 16.1, 16.2, 16.4, 61.5, 63.5
documents referred to in 1 1. 2 ( 1 6 ) ( 1 9 ) Equipment 1 1. 2 ( 7 ) , 23.1, 31.2, 92.2
early Completion b onus X6.1
facilities and services provided/paid for by 40.2
Employer's risks 80.1
fault 61.1, 61.4, C 1 1 . 2 ( 2 5 ) , 0 1 1 . 2 ( 2 5 ) ,
forecasts of Defined Cost C20.4, D20.4, E20.4, E11.2025), F11.2(26)
F20.4 health and safety 27.4
insurance 84.1, 8 7 .2
illegal/impossible requirements 18.1
low performance damages X17.1
implementing compensation events 32.1, 65.1,
named key person 24.1
E65.3, F65.3
payment 51.2, X14.1, X14.3 indemnity 83.1
performance b ond X13.1
instruction(s) 14.3, 24.2, 27.3, 34.1, 36.1,
performance level X17.1
6 0 . 1 ( 1 0 ) , 61.2, 61.4-6, 62.1, 62.3-4, 82.1,
price adjustment for inflation X1.1(0), X1.3
87.1, 91.6, 026.4, D26.4, E26.4, F26.4, X2.1
programme 1 1. 2 ( 1 ) , 3 1 . 1 , 50.3
insurance 84.1-2, 85.1, 85.3-4, 86.1, 87.1-3
start-to-Completion interval 32.2
Key Date 14.3, 30.3
for subcontract C26.4, D26.4, E26.4, F26.4
leaving Site/Working Areas 92.2
take over of works 35.1
liabilities 14.1, 61.4, X15.1
terms identified 11.1
liability limitation X18.1-5
third party rights Y3.1
low-performance damages X17.1
time allowances 13.4, 3 1 . 1
management responsibility F20.2
weather data/weather measurement 60.1(13)
marking of Equipment, Plant and Materials 71.1

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method of working 35.3, A54.2, C54.2 Contractor's share C50.6, C53, C 5 3 . 1 - C 5 3 . 4 , C93.4,
non-corrected Defects 45.1-2 C93.6, D50.6, 053, 093.5-6
notification of compensation events 6 1 . 1 - 6 , X2.1 Contractor's share percentage C53.1, 053.5
notified of delegate for Project Manager /Supervisor Contracts (Rights of Third Parties) Act ( 1 9 9 9 ) Y(UK)3
14.2 Core Group X12.2(3-5)
notified of replacement for Project Manager/ composition X 1 2 . 1 ( 3 )
Supervisor 14.4 correcting
objects of value/historical-interest 73.1 assessment of amount due 50.5, 5 1. 3 , X 1 . 2
obligations 9 1 . 2 assumptions about compensation events 6 0. 1 ( 1 7 ) ,
parent company guarantee X4.1 61.6
as Party to contract 1 1. 2 ( 1 1 ) Bill of Quantities mistakes B60.6, D60.6
payment(s) 40.6, 45.1-2, 5 1 . 1 , 86.1, 050.6, Defects 1 1. 2 ( 2 ) , 3 2 . 1 , 40.4, 43, 45.1-2,
c52.2, 050.6, 052.2, £50.7, E52.2, F50.7, 0 1 1 . 2 ( 2 5 ) , 0 1 1 . 2 ( 2 5 ) , £ 1 1. 2 ( 2 5 )
F 5 2 . 2 , X 3. 1 , X3.2 cost components data A 1 1 . 2 ( 2 2 ) , C11.2(23),
performance bond X13.1 c63.15, 0 1 1. 2 ( 2 3 ) , 063.15, E 1 1. 2 ( 2 7 ),
period for reply 13.3-5, 32.2 E63.15
physical conditions 6 0. 1 ( 1 2 ) , 60.2, 60.3 costs
Plant and Materials 2 7 . 2 , 41.1, 80.1, 92.2, 93.1 additional costs 25.3
prevention 19.1 Contractor 5 2 . 1 , C40.7, 040.7
programme (first/revised) 1 1 . 2 ( 1 ) , 3 1 . 1 - 3 , Defect(s) correction 45.1-2
3 2 . 1 - 2 , 50.3, 62.2, 64.1, 64.2 due to Adjudicator's/tribunal's decision 51.3
proposed instruction/changed-decision 61.2 Employer's risk 80.1
quotations 36.1, 36.2, 44.2, 62.1-5, 64.1 indemnity against 83.1, 83.2
reaction to compensation event 63.7 insurance 86.1, 87 .3
repairs/replacements 82.1 test/inspection repeat 40.6
reply to communication 13.3-5, 31.3, 3 2 . 2 , see also excess costs
6 0 . 1 ( 6 ) , 62.3-6 creditors, arrangement made with 91.1
responsibilities 14.1, 20--7, C20.3, C20.4, C26.4, currency of this contract 51.1, C50.6, 050.6, E50.7,
D20.3-4, D26.4, E20.3-4, E26.4, F20.2-4, F50.7, X3.1, X3.2
F26.4
Risk Register revision 16.4 damage(s)
risks 63.6, 81.1, 84.2, 85.4 delay X7.1, X7.2
searching (for Defects) 42.1 Employer's risk 80.1
starting/stopping work 30.1, 34.1, 9 1. 6 insurance against 84.1
subcontract contract data C26.4, D26.4, E26.4, low performance X1 7.1
F26.4 repair by Contractor 82.1
subcontracted work C20.3, D20.3, E20.3, F20.2 , death insurance 84.1
F20.3 decision(s)
Subcontractor 11.2(17), 26.1-3 Adjudicator or tribunal 51.3
take over of works 35.3, 43.4, 80.1 assessment date 50.1
termination 80.1, 90.2, 90.4-5, 91.2, 91.4, and compensation events 60.1(8), 61.1, 61.4-6
91.6-7 date of Completion 30.2
tests and inspections 40.2, 40.3, 40 .5, 40.6, 41.1, Project Manager 30.2, 50.1, 60.1(8), 61.1-2,
C40. 7 , D40.7 61.4-6, 63.5, 64.1, C 1 1 . 2 ( 2 5 ) , D 1 1 . 2 ( 2 5 ) ,
title to objects and materials within Site 73.1, 73.2 E11.2(25), F11.2(26)
title to Plant and Materials 70.1, 70.2 risk reduction meeting 16.4
Wo rks Information 11.2(19), 14.3, 63.8-9 default(s)
Contractor's design 21 Contractor's 91.2, 91.3, 91.6
acceptance 21.2, 2 1. 3 Employer's 91.6
approval from Others 2 7 . 1 defect correction period 40.5, 43.2-4, 45.1
and Defects 1 1. 2 ( 5 ) Defect(s)
and Equipment design 23.1 accepting 44, 6 0 . 1 ( 1 ) ( 9 )
liability of Contractor 14.1 Contractor's compensation X15.2
limitation of Contractor's liability X15.1 Contractor's liability 1 1 . 2 ( 5 ) , X15.1, X18.3
management by Contractor F20.2 correcting 1 1 . 2 ( 2 ) ( 6 ) , 32.1, 40.4, 43, 4 5 . 2 ,
part submission 21.3 C 1 1. 2 ( 2 5 ) , 0 1 1 . 2 ( 2 5 ) £ 1 1 . 2 ( 2 5 )
submission to Project Manager 21.2 correction after Completion C 1 1 . 2 ( 2 3 )
use by Employer 22.1 defect correction period 40.5, 43.2-4, 45.1
and Works Information 2 1. 1 , 21.2, 6 0 . 1 ( 1 ) definition 1 1 . 2 ( 5)
Contractor's employees 24.1 liability limitation X18.3
insurance 84.1 loss/damage/wear due to 80.1
removing 24.2 low performance damages X17.1
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Defect(s) (continued) when United Kingdom Housing Grants, Construction
notifying 1 1 . 2 ( 6 ) , 42.2, 4 3 . 1 - 2 and Regeneration Act (1996) applies W2
and priced contract(s) A 1 1 . 2 ( 2 7 ) , 8 1 1 . 2 ( 2 8 )
searching (for) 42.1, 60.1(10) early Completion bonus X6.1
and tests/inspections 40.4, 40.6 early warning 16
uncorrected 45, 60.1(9) effects 16.1, 32.1
Defects Certificate 1 1. 2 ( 6 ) , 43.3 Key Date 16.1
and assessment of amount due 50.1 responsibility 16.1, 61.5, 63.5, C 1 1 . 2 ( 2 5 )
and Contractor's risks 8 1 . 1 - 2 011.2(25), E 1 1. 2 ( 2 5 ) , F11.2(26)
and Employer's risks 80.1 Risk Register 16.1, 16.3-4
and insurance cover 84.2 employees, of Adjudicator W1.2(5), W 2 . 2 ( 5 )
Key Performance Indicators X20.2 Employer
liability limitation X18.3 access 43.4
low performance damages X17.1 access and use of Site 3 3 . 1 , 60.1(2)
and retention X16.2 actions 10.1
defects date 1 1 . 2 ( 6 ) , 40.5 adjudication W 1 . 3 ( 1 )
and compensation events 61.7 advanced payment by X14.1-3
searching/notifying Defects 42.1-2 amount due to be paid by 50.2, 5 1 . 1
testing 4 2 . 1 - 2 breach of contract by 60.1(18)
Defined Cost 52, C 1 1 . 2 ( 2 9 ) , 011.2(29), certificates issued to 13.6
E 1 1. 2 ( 2 9 )( 3 2 ) , F l l . 2 ( 2 9 )( 3 2 ) co-operation 25.2, 25.3
in amount due on termination 93.1, 93.2 compensation events 6 0 . 1 ( 1 - 3 ) ( 5 ) ( 1 4 ) ( 1 6 ) ( 1 8 )
and compensation events 6 1 . 4 , 63.1-2, 63.7, Completion of works on termination 93.1, 93.2
A63.10, 860.4, 863.10, 863.13, C63.11, Contractor's design 22.1
060.4, 063.11, X 1 . 3 , X 2 . 1 Contractor's parent company guarantee X4.1
definition(s) A 1 1. 2 ( 2 2 ) , 8 1 1 . 2 ( 2 2 ) , C 1 1 . 2 ( 2 3 ) , dates 31.2, 33.1, 6 0 . 1 ( 2 ) ( 3 ) ( 5 )
0 1 1 . 2 ( 2 3 ) , £11.2(23), F11.2(24) default 91.6
and Fee calculation 1 1 . 2 ( 8 ) , 63.1, C 1 1 . 2 ( 2 9 ) , Defects Certificate 43.3
0 1 1. 2 ( 2 9 ) , £ 1 1. 2 ( 2 9 ) facilities and services provided by 40.2, 60.1(16)
forecast C20.4, 020.4, E20.4, F20.4 fault 80.1
payment on termination 093.5 hindered by Contractor 91.3
payments made by Contractor C50.6, C52.2, indemnity 83.1
C52.3, 050.6, 052.2, 052.3, E 5 0 . 7 , E52.2, insurance 84.1, 85.4, 86.1, 87
E52.3, F50.7, F52.2, F52.3 as Party to contract 1 1 . 2 ( 1 1 )
defined terms 11, X1.1 payments by 51.1
Delay/delay payments to C 1 1 . 2 ( 2 3 ) , 0 1 1 . 2 ( 2 3 ) , E11.2(23),
and compensation events 62.2, 63.3, 860.5, 060.5 F11.2(23)
damages X7.1, X7.2 performance bond X13.1
early warning to be given 16.1 Plant and Materials 31.2, 80.1
plans to deal with 32.1 programme 31.2, 6 0 . 1 ( 5 )
and priced contract(s) A 1 1 . 2 ( 2 7 ) , 811.2(28) repayment of delay damages X7.1
and tests/inspections 40.5, 6 0 . 1 ( 1 1 ) replacement of Project Manager/Supervisor 14.4
delegation by Project Manager/Supervisor 14.2 responsibilities 83.2, 87.2
delivery, testing and inspection before 41 rights to change 63.4
demolition 22.1, 73.2 risks 60.1(14), 80, 8 1 . 1 , 83.2, 85.4
design take over of works 3 5 . 1 - 3 , 43.4, 80.1, X6.1, X7.1,
Contractor's 11.2(5), 21, 22.1, 23.1, 27.1 X16.1,X16.2
Employer's 80.1 termination 80.1, 90.2, 91.2-3, 91.6-7, 92.1-2,
of Equipment 23 93.1-2
of works C20.3, D20.3, E20.3, F20.3 tests and inspections 40.2, 40.6, 6 0 . 1 ( 1 6 ) , C40.7,
see also Contractor's design 040.7
direct fee percentage 1 1 . 2 ( 8 ) , 93.2 title to Equipment, Plant and Materials 93.1
Disallowed Cost C 1 1 . 2 ( 2 3 ) , 0 1 1. 2 ( 2 3 ) , £ 1 1. 2 ( 2 3 ) , title to Plant and Materials 70, 93.1
F 1 1. 2 ( 2 4 ) use of works by 1 1. 2 ( 2 ) , 35.3
definition(s) C 1 1. 2 ( 2 5 ) , 0 1 1. 2 ( 2 5 ). E 1 1 . 2 ( 2 5 ) , working with see co-operation
F11.2(26) Works Information 22.1, 6 0. 1 ( 1 ) ( 5 ) ( 1 6 )
discounts, deduction from prices 52.1 Employer's design 80.1
dismantling (during searching) 42.1 Equipment
dispute resolution definition 1 1 . 2 ( 7 )
unless United Kingdom Housing Grants, design of 23
Construction and Regeneration Act ( 1996) left on Site 72.1, 80.1
applies W1 loss or damage 84.2
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loss, dama g e or w ear 80.1 indemnity 83
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marking of 7 0 . 1, 71 information
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and programme 31.2 in Activity Schedule A54.1, C54.1
l ra tes in C ontract Data X1.3 in Bill of Quantities B55.1, D55.1
t removal of 72, 92.2, 93.2 later recorded 65.2
f termination 92.2 in programme 31.2, 31.3, 50.3
title 70.1, 70.2. 92.2 provided to Others 2 5 . 1
f use by Employer 92.2 publicly available 60.2
see a/so P lant and M aterials see a/so Site Information; Works Information
i errors, Adjudicator W1.3(11) injury insurance 84.1
j excavation materials 73.2 inspection(s) 40, 6 0 . 1 ( 1 0 ) ( 1 1 )
} excess costs, Contractor's share C5 3.2 before delivery 41
exchange rates C50.6, D50.6, E50.7, F50.7, X3.1 Contractor's cost C40.7, D40.7
f experienced contractor instalment repayment of advanced payment X14.3
, and compensation events 6 0 . 1 ( 1 2 ) , 60.2, 61.5, instruction(s)
63.5 compensation events resulting 6 0 . 1 ( 1 ) ( 4 ) ( 7 ) ,
and physical conditions on Site 6 0 . 1 ( 1 2 ) , 60.2 6 1. 1
~ and prevention 19.1, 6 0 . 1 ( 1 9 ) , 91.7 to Contractor 2 7 .3
} extension of time for decision/quotation/reply 13.5, form of communication 13.1
j. 62.5 insurance 87.1
F objects of value/interest 60.1(7)
facilities and services quotation(s) to be submitted 36.1, 61.1-2,
for tests/inspections 40.2, 42.1, 60.1(16) 61.5-6, 62.1, 62.3-4, 64.1, X2.1
I see a/so services to remove Contractor's employee 24.2
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# failure to pay in time, actions to be taken 91.4 on resolution of ambiguities and inconsistencies
fault of C ontractor 6 1 . 1 , 61.4, C 1 1 . 2 ( 2 5 ) , 17.1
D11.2(25), E 11.2(25), F1 1 .2 ( 26) to search (for Defects) 42.1
f fault of Employer or his design 80.1 to stop/not start work 34, 60.1(4), 91.6
i Fee C11.2(29), 0 1 1. 2 ( 2 9 ) , E11.2(29)(32), and termination 91.6, 92.2
t F 11.2(29,32) that change Key Date 14.3
calculation(s) 11.2(8), 63.1, 93.2, C50.6, D50.6, that change Works I nformation 14.3, 18.1, 44.2,
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E 50.7, F 50.7 60.1(1), 63.8-9
see also payment(s) insurance
fee percentage see direct fee percentage certificates 85.1, 86.1, 8 7.1 - 3
I fl oat, provision in programme 31.2 cover 84
forecasts 61.6, 63.1, 65.2, 93.2, C20.4 , C53 .3, by Employer 84.1, 85.4, 86.1, 87
D 2 0 .4 , D53.7 , E 20.4 , E65.3, F20.4, F65.3 policies 85, 86.1, 8 7.1-3
form of communications 13.1 signatories 85.1
t fraud, and insurance 85.2 Insurance T able 84.2

i insurer(s) 85.2, 85.4, X13.1
g r o u p i n gof activities A11.2(27) bo n d s X13.1, X14.2
; guarantee(s) 91.2, X4.1 insurrection, risks due to 80.1
interest
health and safety assessment of 51.2, 51.3
r Co ntractor 2 7 .4 compound calculation 51.4
regulation(s) 91.3 on late payment 51.2
requirements 31.2 and ayment

p certificate(s) 5 1. 3
W orks Information 27.4 repaid delay damages X7.1
hi storical-interest objects found w ithin Site 60.1(7), nterest

i rate 51.4
73.1 interpretation
Housing Grants, Construction and Regeneration Act compensation event 63.8
t ( 1 9 9 6 ) W1, W2, Y(UK)2 conditions of contract 12.3
legal 12
r identified terms 11
t illegal requirements 18 K ey Date 30
implementing compensation events 32.1, 65, A65.4, acceleration 3 6 . 1 , A36. 3 , C36.3, D36.3
865.4, C65.4, D65.4, E65.3, F65.3 assessment of compensation events 63.8-9
impossible requirements 18 and compensation events 6 0 . 1 ( 4 ) , 61.3, 62.2,
Incentive Schedule X 2 0 . 1 , X20.3-5 A65.4 , 8 60.5, 8 65.4, C65.4 , D60.5, D65.4
incentive schedule X20.1 Condition 25.3
incentives, Partnering X12.4 Contractor 14.3, 30.3
inconsistencies 17, 60.3, 63.8, 860.6, D60.6 definition 1 1 . 2 ( 9 )
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Key Date (continued) negligence 80.1
early warning 16.1 nominating body, Adjudicator W 1 . 2 ( 3 ) , W2.2(3)
notification of compensation events 6 1 . 3 , 61.4 notification
and programme 31.2 acceptance of quotation(s) 6 2 . 3 , 65.1
Project Manager 14.3, 6 0 . 1 ( 4 ) adjudication W 1 . 3 ( 1 - 2 ) ( 8 - 9 ) , w 2 . 3 ( 1 - 2 ) ( 8 - 9 )
rights to change 63.4 ambiguities/inconsistencies 17.1
Subcontractor failing to meet C 1 1 . 2 ( 2 3 ) , assessment of compensation event 62.3, 64.3,
D 1 1 . 2 ( 2 3 ) , E l l . 2 ( 2 3 ) , Fl l. 2 ( 2 3 ) 65.1
Key Performance Indicators X20 communication of 13.1, 13.7
aspect of performance X20.1 compensation events and assumptions 6 0 . 1 ( 1 7 ) ,
performance reports X20.2 61
key person 24.1 Contractor's default 91.2, 91.3
Defects 11.2(6), 42.2, 43.1-2
language of communications 13.1 delegate for Project Manager/Supervisor 14.2
language of this contract 13.1 illegal/impossible requirements 18.1
late payment(s) 5 1 . 2 - 3 , X14.2 implementing compensation events A65.4, B65.4,
later recorded information 65.2 C65.4, D65.4, E65.3, F65.3
Latest Index X1.1(b) Project Manager's assessment 64.3, 65.1
law Project Manager's decision(s) 63.5, 64.1
changes in X2, X2.1 proposed instruction/changed-decision 61.2,
and Defect(s) 1 1 . 2 ( 5 ) 62.3
interpretation 12 replacement of Project Manager/Supervisor 14.4
national legislation Y termination 90.1
release of Party from contract 91.5 tests and inspections 40.3, 4 1 . 1
tax(es) 50.2 notified Defects, correction 32.1, 45.2
tests and inspections 40.1
see also Acts objects of value or historical interest 6 0 . 1 ( 7 ) , 73.1
law of the contract 12.2 observing tests 40.3
legal rights, interference with 80.1 open market prices 52.1
legislation, national Y operations (in programme) 31.2, 32.1
liability Others (other people)
Contractor's design 14.1, X15.1 approval by 2 7 . 1
and insurance 84.2 at risk reduction meeting 16.2
limitation X18 co-operation with 25.1
reduction 83.2 Defect(s) correction by 45.2
liquidator for company/partnership 91.1 definition 1 1. 2 ( 1 0 )
loss risks 80.1, 84.1 hindered by Contractor 91.3
low performance Plant and Materials supplied by 80.1
damages X17 and programme 31.2, 60.1(5)
see also performance impairment working with see co-operation
lump sum(s) A l l. 2 ( 3 0 ) , B11.2(28), Cll.2(30), and Works Information 6 0 . 1 ( 5 )
C93.4, D l l. 2 ( 3 1 ) , D63.13 Own Contract, definition X 1 2 . 1 ( 2 )
marking of Equipment, Plant and Materials 71 parent company guarantee X4
materials Parties/Party
access to 27.2 Adjudicator's communications W 1 . 3 ( 6 ) , W 2 . 3 ( 6 )
dates when needed 31.2 Adjudicator's instructions W1.3(5), W2.3(4)
testing/inspection 40.2, 41.1, 42.1, 6 0 . 1 ( 1 6 ) agreement 12.4
title to 73.2 and assessment date 50.1
see also Plant and Materials to contract 1 1 . 2 ( 1 1 )
method of measurement B60.6, D60.6 indemnity liability 83.1, 83.2
method of working 35.3, A54.2, 054.2 insurance 84.2, 85.3
military power, risks due to 80.1 prevention 19.1
mistake(s) to subcontract 26.3
assessment of amount due 51.3 and termination 90.1, 91.1, 91.5
Bill of Quant iti es 860.6, 060.6 third party rights Y3.1
multiple currencies X3 tribunal reviews W1.4(1-4), W 2 . 4 ( 1 - 3 ) ( 5 )
Partnering X12
named person 24.1 actions X12.2
national legislation Y change of Partnering information X12.3(6)
NEC Adjudicator's Contract Wl.2(1), W2.2(1) Core Group X12.2(3-5)
NEC contract 26.3, C26.4, D26.4, E26.4, F26.4 defined terms X12.1
80 v copyright nec 2005 www.neccontract.com

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early warning X 1 2 . 3 ( 3 ) assessment of compensation events X1. 3
incentives X12.4 calculation of X1.2
Key Performance Indicators X 1 2 . 4 ( 1 - 2 ) definition X1.1(c)
Own Contract X 1 2 . 1 ( 2 ) price adjustment use X 1 . 4 , X 1. 5
Partnering Information X 1 2. 1 ( 4 ) , X 1 2 . 3 ( 1 ) Price or

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representatives X12.2(2) adjustment or inflation X1.4, X1.5

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subcontracting X12.3( 9) and assessment of amount due 50.2, 50.3, 93.2,
timetable X12.3(7) C93.4, D93.5
payment(s) 51 and assessment of Contractor's share C53.1 - 4,
advanced 9 3 . 1 , X14.1-3 D53.5- 8
certified 50.5, 5 1 . 1 - 3 , 9 0 . 4 definition(s) A1 1. 2(27), 8 11.2(2 8 ) , C 1 1 . 2 ( 2 9 ) ,
conditional on success of test or inspection 40.5 011.2(29), £ 1 1. 2 ( 2 9 ) , F11.2(29)
Contractor 40.6, 45.2, 51.1, 86.1, 050.6, 052.2, and retention X16.1
D50.6, D52.2, E50. 7, E52.2, F50.7, F52.2, Prices/prices/prices
X3.1-2 and acceleration 36.1, A36.3, 836.3, C36.3,
dates Y2.2 D36.3
Employer's insurance 8 7 .3 and Activity Schedule A 1 1 . 2 ( 2 0 ) ( 2 7 ) , A54.3,
Housing Grants, Construction and Regeneration Act A63.12, C11.2 ( 30), C54.3, C 63.12
(1996) Y2.2-3 and Bill of Quantities 8 11.2(31), 8 60.4, 8 60.6,
interest 51.4 863.13, 011.2(31), 060.4, D60.6, D63.13
late 51 . 2 - 3 , X14.2 changes to 63.1-2
and marking of Equipment, Plant and M aterials and compensation events 61.4, 62.2, 63.1-2,
7 1.1 A63.10, A65.4, B60.4, B60.6, B63.10,
not made 91. 4 863.13, 865.4, 063.12, €65.4, D60.4,
notice of intention Y2.3 D60.6, D63.13, D65.4, E65.3, F65.3, X2.1
taxes 50.2 competitively tendered/open market 52.1
on termination 93.1, 93.2, A93.3, C 93.4 , C93.6 , Contractor's share C53.1 - C53.4, D53.5
D93.5 - 6 definition A11.2(3 0 ), 8 1 1. 2 ( 3 1 ) , C 11.2(30),
time to be made 5 1 . 2 , X 1 4. 2 011.2(31), E11.2(32), F11.2(32)
withholding Y2.3 early warning of ossible increase 16.1

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p ayment certificate 50.5, 51.1, 51.3, 91 .4 if Defect(s) u ncorrected/accepted 44.2
p ayment clauses 50 notification of compensation events 61.3
p eople 24 rights to change 63.4
t rates in Contract Data X1.3 and termination 93.2, C93.4, D93.5
; see also employees procedures, termination 90.2, 90.3, 92
F performance, see also Key Performance Indicators proceedings
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[ performance bo nd X13, X13.1
Employer's risk 80.1
performance impairment indemnity against 83.1, 83.2

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early warning of possibility 16.1 proc urement rocedure C11.2 ( 25 ) , D11.2 ( 25),
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see so low performance
a/ E11.2(25 ) , F1 1 .2 ( 26)
} performance reports X20.2 programme 1 1. 2 ( 1 ) , 31, 50.3, 62.2, 64.1
perf ormance suspension Y2.4 accelerated 36.1 , A36.3, B36.3, C36.3, D36.3,
period for reply 13.3, 13.4, 32.2, 36.2 E36.4, F36.4
extension agreed 13.5

dates to be shown 3 1.2, 32.1, A31.4, C31.4
p ersonal injury 84.1

revised 32, 36.1, 62.2, 64.2, A36.3, 8 36.3, C36.3 ,
see also i nsurance D36.3, E36.4, F36.4
physical conditions of Site 60.1(12), 60.2, 60.3 Project Manager
Plant and Materials 11.2(12)(17) acceleration 36.1, A36.3, 836.3, C 36.3 , D36.3 ,
a ccess to 27.2, 60.1(2) E36.4, F36.4
dat es when needed 31.2 acceptance of communication/proposal/submission
loss of o r damage to 80.1, 82.1, 84.1 13.4, 14.1, 15.1, 21.2, 31.3, 85.1
not used to Pro vide the Works C11.2(25), acceptance of contract data for subcontract C26 .4,
D11.2(25), E11.2(25) D26.4, E26.4 , F26.4
removal of 92.2
acceptance of otation
qu 4 4.2, 60.1(9), 62.3, 65.1,
replacement 82.1, 84.1 A36.3 , 836.3 , C36.3, D36.3 , E36.4, F36.4
a nd termination 92.1, 9 3. 1 access 2 7 .2
testing/inspection before delivery 41.1 Activity Schedule A54.2, 054.2
title 70.1, 70.2, 92.1, 93.1 addition to working areas 15.1
wastage C 1 1. 2 ( 2 5 ) , D 1 1. 2 ( 2 5 ) , E 1 1 . 2 ( 2 5 ) Adjudicator's reviews/revisions W1.3(5), W 2.3(4 )
see also E quipment advanced payment bond X14.2
prevention 19 and ambiguities/inconsistencies 17.1
Price Adjustment Factor(s) X1 assessment of amount due 50.1, 50.4, 50.5
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>neC3 sngneenng an construction contract
Project Manager (continued) quotations fo r compensation events 6 2 . 1 , 62.3 - 5
assessment of compensation events 61.6, 63.9, replacement of 14.4
64, A63.10, B63.10, B63.13, C63.15, reply to communication 13.3-5, 60.1(6), 62. 3 ,
D63.13, D63.15, E63.15 6 2 . 5 -- 6
assessment of Contractor's share C53.1, C53.3-4, request to remove resources from Working Areas
C93.4, C93.6, D53.5, D53. 7--8, D93.5-6 C 1 1. 2 ( 2 5 ) , 011.2025), £11.2025)
assessment date decided by 50.1 R isk R egister revision 16.4
assessment of Defect(s) correction cost 45.2 start/stop of work 34.1 , 6 0 . 1 ( 4 ) , 9 1. 6
assessment of test/inspection cost 40.6 subcontract conditions 26.3
assumptions about compensation events 6 0 . 1 ( 1 7 ) , subcontracting C26.4
61.6 Su bcontractor acceptance 26.2, 91.2
certificates 13.6, 30.2, 50.5, 5 1 . 1 - 3 , 6 0 . 1 ( 1 5 ) , take over of w orks 35.3 , 43.4 , 6 0 . 1 ( 1 5 )
82.1, 90.1, 90.3-4, C93.4, D93.5 and termination 9 0 .1 , 9 0 .3 , 90.4, 91.2
co-operation 10.1, 16.3 tests a nd inspections C40. 7, D40. 7
compensation events W orks Information 14.3, 18.1, 44.2, 60.1(1)
6 0 . 1 ( 1 ) ( 4 ) ( 6 ) ( 7 ) ( 8 ) ( 9 ) ( 1 5 ) ( 1 7 ) , 6 1. 1 - 6 , property, loss or damage 84.1
A 63.10 , B63.10 , C63.15 , D63.15 , E 63.15 , proposal( s)
F20.5 acceleration 36.1
Completion 30.2 to add to W orking Areas 15.1
Contractor's advice C20.3, D20.3, E20.3, F20.3 Defect(s) acceptance/non-correction 44.1
Contractor's default 91.2, 91.3 form of communication 13.1
Contractor's design 1 1 . 2 ( 5 ) , 21.2 risk reduction meeting 16.3, 16.4
Contractor's employees 24.1, 24.2 proposed instruction or changed decision 61.2, 62.3
correction of mistakes in Bill of Quantities B60.6 , Provide the Works 20
060.6 and addition to W orking Areas 15.1
date of Completion 30.2 Contractor's responsibilities 11.2(7), 14.1, 20.1,
decisions 30.2, 50.1, 6 0 . 1 ( 8 ) , 61.1-2, 6 1 . 4 - 6 , 23.1, 26.3, 020.3-4, 026.4, D20.3-4,
63.5, 64.1, C 11.2 ( 25) , D 1 1 . 2 ( 2 5 ) , 026.4, £20.3-4, E26.4, F20.3-5, F26.4
E1 1.2(25) , F 1 1 . 2 ( 2 6 ) and Equipment 1 1 . 2 ( 7 ) , 23.1
Defect(s) acceptance/non-correction 44.1, 44.2 meaning of term 1 1 . 2 ( 1 3 )
delegation 14.2 Pl ant and Materials not used C11.2(25),
Disallowed Cost decision C 1 1 . 2 ( 2 5 ) , D 1 1 . 2 ( 2 5 ) , D 1 1. 2 ( 2 5 ) , E 11.2 ( 25)
E11.2(2 5), F11.2(26) and programme 31.2
duties required 10.1, 14 resources not used C 1 1 . 2 ( 2 5 ) , 011.2(25),
early warning 16.1, 16.2, 16.4, 61.5, 63.5 E11.2(25)
Equipment design 23.1 and W orks Information 1 1 . 2 ( 1 9 ) , 20.1, C11.2(25),
forecasts of Defined Cost C20.4, D20.4, E 20.4, D1 1. 2(25), E 11.2(25)
F20.4 publicly available information 60.2
illegal/impossible requirements 18.1
implementing compensation events 65.1, E65.3, quantities B 1 1. 2 ( 2 8 ) ( 3 1 ) , 860.4-7, D 1 1 . 2 ( 3 1 ) ,
F65.3 060.4-7
inspection of Contractor's accounts and records see also bill of quantities; Bill of Quantities
€52.3, 052.3, E52.3, F52.3 quotations
instruction(s) 14.3, 17.1, 18.1, 24.2, 2 7 .3, 34.1, for acceleration 36.1-2, 60.1(9), A36.3, B36.3,
44.2, 6 0 . 1 ( 1 ) ( 4 ) ( 7 ) , 61.1-2, 61.4, 62.1, C36.3, D36.3, E36.4, F36.4
62.3-4, 82.1, 87.1, 91.6, C26.4, D 2 6.4 , acceptance of 36.1, 44.2, 6 0 . 1 ( 9 ) , 62.3, 65.1,
E26.4, F26.4, X 2.1 A36.3, 836.3, C36.3, D36.3
insurance 85.1, 87.1 for compensation events 61.4, 61.5, 62, 64.1,
interest on payments 51.3 64.3-4, 65.1, A11.2(22), C 1 1. 2 ( 2 5 ) ,
Key Date 14.3, 60.1(4) 0 1 1. 2 ( 2 5 ) , E 1 1. 2 ( 2 5 ) , F 1 1. 2 ( 2 6 ) X 2. 1
Key P erformance Indicators X 2 0 .3 if Defect(s) accepted 44.2, 60.1(9)
moving of Equipment, Plant and M aterials 70.2, 72.1 for proposed instruction/changed-decision 61.2
notification of compensation events 61.1-6, X2.1 revised 62.3, 62.4, 64.1
notification of Contractor's default 91.2, 91.3
notification of implementing compensation events radioactive contamination 80.1
E65.3 , F65.3 rates
objects of value/historical-interest 60.1(7), 73.1 in assessing compensation events A63.14, 863.13,
performance bond X13.1 D63.13
prevention 19.1 in Bi ll of Quantities B 1 1 . 2 ( 2 8 ) ( 3 1 ) , 860.4,
programme 11.2(1), 31.1, 31.3, 32.2, 50.3 D11.2 ( 25,31 ) , D60.4, D63.13
qu otations for acceleration 36.1-2, 60.1(9), in Contract Data X l.3, X 6 . 1 , X 7 . 1
A 36.3 , 8 36.3 , C36.3 , D36.3 rebates, deduction from prices 5 2 .1

e e" n e C 3
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rebellion, risks due to 80.1 Employer's 6 0 . 1 ( 1 4 ) , 80, 81.1, 83.2, 85.4

receipt of communications 13.1
receiver over assets 91.1

safety see health and safety
records
samples 40.2, 42.1, 60.1(16)
Contractor's C 1 1 . 2 ( 2 5 ) , 052.2-3, 0 1 1 . 2 ( 2 5 ) , savings, Contractor's share C53.2
0 5 2. 2 - 3 , £ 1 1 . 2 0 2 5 ) , £52.2-3, F 1 1. 2 ( 2 6 ) , Schedule of Cost Compon ents C 11.2(23), D 11 .2(23),

F52.2-3 E11.2(23)
form of communication 13.1 Shorter Schedule A 1 1 . 2 ( 2 2 ) , B11.2(22), €63.15,
risk reduction meeting 16.4 063.15, E63.15
Risk Register revision 16.4 S chedule of Partners X 1 2 . 1 ( 1 )

re-covering (during searching) 4 2 . 1 searching for Defects 42.1, 60.1(10)
re-erecting (during searching) 42.1 section of the works X5.1
referral, adjudication W 1 . 3 ( 1 - 3 ) , W 2 . 3 ( 1 - 3 ) sectional Completion X5

removing services 11.2(13)
Contractor's employee 24.2 see also facilities and services

Equipment 72, 92.2, 93.2 share ranges C53.1, D53.5
Plant and Materials 92.2 Shorter Schedule of Cost Components A11.2(22),
resources C 1 1. 2 ( 2 5 ) , 0 1 1 . 2 ( 2 5 ) , E 1 1. 2 ( 2 5 ) 811.2(22) , C63.15 , D63.15 , E63.15
repairs 82 Site
replacement( s) access to 31.2, 60.1(2)
of Adjudicator W 1. 2 ( 4 ) , W2.2(4) access and use of 33.1
Contractor's employee 24.1 definition 11.2(15)
Equipment 80.1, 84.1 historical-interest/valuable objects found 60.1(7),
Plant and Materials 82.1, 84.1 73.1
Project Manager/Supervisor 14.4 information describing 1 1 . 2 ( 1 6 )
reply location X2.1
form of communication 13.1 physical conditions 60.1(12), 60.2, 60.3
time allowed 13.3-5, 31.3, 32.2, 3 6 . 2 , 6 0. 1 ( 6 ) , removal of Equipment, Plant and Materials 72.1,
62.5-6 92.2
resignation of Adjudicator W1.2(3), W 2 . 2 ( 3 ) and risks 80.1
• resources not used to Provide the Works C 1 1 . 2 ( 2 5 ) , st arting of work 30.1
011.2(25), £11.2(25) termination 92.2
responsibilities visual inspection 60.2
Contractor 14.1, 20-7, C20.3, C20.4, 026.4, S ite nformation 11.2(16), 60.2
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020.3-4, 026.4, E20.3-4, E26.4, F20.2-4, and Activity S chedule A54.1 , A54.2 , C54.1
F26.4 ambiguities/inconsistencies 60.3
Contractor's 1 1 . 2 ( 7 ) , 14.1, 20, 83.2 and i

B ll of Quantities B55.1, D55.1
. Employer's 83.2, 87.2 starting date 31.2, 32.2, 50.1, 81.1, 84.2, 87.1,
retention 50.3, 93.1, X16 C20 .4, D20 .4, E 20 .4, F20.4
retention free amount X16.1 dispute resolution W 1 . 2 ( 1 ) , w2.2(1)

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retention percentage X16.1 insurance 85.1
reviews, tribunal W1.4(1-6), W 2 . 4 ( 1 - 5 ) start(ing) work 30
revised Activity Schedule A54.2, A54.3, C54.2, instruction(s) given not to 3 4 . 1 , 6 0 . 1 ( 4 ) , 91.6
C54.3 stopping work 34.1, 6 0 . 1 ( 4 ) , 91.6
revised programme 32.1-2, 36.1, 64.2, A36.3, strikes, risks due to 80.1
836.3, C36.3, D36.3, E36.4, F36.4 subcontract
revised quotation 62.3, 62.4, 64.1 adjudication W1.3(4), W2.3(3)
revolution, risks due to 80.1 contract data C26.4, D 26 .4 , E26.4, F26.4
.·_ Rights of Third Parties (Contracts) Act Y(UK)3 subcontracted fee percentage 1 1 . 2 ( 8 )
riot risks 80.1 subcontracting 26, C20.3, C26.4, D 20.3, D 26 .4 ,
risk allowances 63.6 E20.3, £26.4, F20.2, F20.3, F26.4
risk reduction meeting assignment of benefits 92.2

f i purpose 16.3 conditions 26.3
. records 16.4 Contractor's management responsibility F20.2
who attends 16.2 Defined Cost A11.2(22), C11.2(23), 011.2(23),

!.
t Risk Register E11.2(23), F11.2(26)
] definition 1 1. 2 ( 1 4 ) Subcontractor
acceptance by Project Manager 26.2, 91.2

} early warning 16.1, 16.3-4
t Project Manager revision 16.4 appointment 26.2, 26.3, 91.2
i records revision 16.4 co mpensation event assessments C52.2,
D11.2(25), D 52.2, E11.2(25), E52.2,

risks
Contractor's 63.6, 81, 83.2, 84.2, 85.4 F11.2(26), F52.2
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Subcontractor ( continued) certification of payment 50.5, 51.1, 90.4
definition 1 1 . 2 ( 1 7 ) certification of take over 35.3
payments mace C 1 1 . 2 ( 2 3 ) ( 2 5 ) , D 1 1 . 2 ( 2 3 ) ( 2 5 ) , compensation events 61.1, 61.3, 61.4, 64.3-4
£11.2(23)625), F11.2(24)026) Defect(s) correction 43.2
submission( s) extension(s) agreed 13.5, 62.5-6
addition to Working Areas 15.1 payment of amount due 5 1 . 2 , 91.4
communications 13.1, 13.4 programme submission/acceptance 3 1 . 1 , 3 1 . 3 ,
Contractor's design 21.2 32.2
Equipment design 23.1 Project Manager not replying 64.4
forecasts of total Defined Cost C20.4, D20.4, reply to communications 13.3, 13.5, 31.3, 32.2,
E20.4, F20.4 60.1(6)
insurance policies/certificates 85.1, 86.1, 8 7.1. start/restart of work 91.6
87.3 time clauses 30
non-acceptance of 13.8, 1 5 . 1 , 21.2, 23.1, 26.2, time risk allowances 31.2, 63.6
26.3 timings, adjudication W 1 . 3 ( 8 ) ( 1 0 - 1 1 ) ,
programme (frst/revised) 3 1 . 2 , 32.2, 50.3, 64.1, w 2 . 3 ( 2 ) ( 8 ) ( 1 1 -- 1 2 )
64.2, A31.4, €31.4 title 70
quotations 36.1, 3 6 . 2 , 44.2, 61.4, 62.1, 62.3-6, Equipment, Plant and Materials 92.1, 92.2
64.1, X2.1 materials from excavation and demolition 73.2
Subcontractor/ subcontract conditions/ contract object of value or historical interest 73.1
data 26.2, 26.3, 026.4, D26.4, E26.4, F26.4 Plant and Materials 70
subrogation rights 85.2 total of the Defined Cost, payment on termination
Supervisor D93.5
access 2 7 . 2 Tota I of the Prices
Adjudicator's reviews/revisions W1.3(5), W2.3(4) Contractor's share D53.5-8
certificates issued by 13.6, 43.3, 50.1 identified and defined terms D11.2(33)
and compensation events 6 0. 1 ( 6 ) ( 8 ) ( 1 0 ) ( 1 1 ) , total of the Prices
61.1 Activity Schedule A54.3, C54.3
Defects notified by 1 1. 2 ( 6 ) , 42.2, 43.1, 43.3 adjustment for inflation X1.5
delegation 14.2 compensation events B60.4, D60.4
duties required 10.1, 14 Contractor's share C53.1, C53.3
instructions given by 2 7 . 3 , 61.1 early warning of possible increase 16.1
marking of Equipment, Plant and Materials 70.1, identified and defined terms 1 1 . 2 ( 2 7 )
71.1 payment on termination 93.2, C93.4 , 093.4
replacement of 14.4 tribunal
reply to communication 13.3, 14.1, 60.1(6) Adjudicator W1.3(2)(10), W 2. 3 ( 1 1 )
searching (for Defects) 42.1, 60.1(10) arbitration W1.4(5), W2.4(4)
tests and inspections 40.3, 40.5, 41.1, 6 0 . 1 ( 1 1 ) costs D11.2(25)
suppliers 1 1 . 2 ( 1 0 ) ( 1 7 ) decisions 5 1. 3
proceedings C11.2(25), 011.2(25), £ 1 1. 2 ( 2 5 )
take over of works 35, 43.4, 6 0 . 1 ( 1 5 ) , 80.1, X6.1, reviews W1.4(1-6), W2.4(1-5)
X7.1,X16.1,X16.2 trust and co-operation 10.1, 26.3, X12.3(1)
taxes 52.1
payment 50.2 uncorrected Defects 45, 60.1(9)
termination 90 uncovering work (during search) 42.1
amount due on 90.2, 90.4, 93.1, 93.2, A93.3 undecided disputes, Adjudicator W1.2(4), W2.2(4)
certification of 90.1, 90.3, 90.5, C93.4, D93.5 United Kingdom Housing Grants, Construction and
and insurance cover 84.2 Regeneration Ac t ( 1 9 9 6 ) W1, W2
loss/damage risks 80.1 use of works by Employer 1 1 . 2 ( 2 ) , 35.3
payment on 93.1, 93.2, A93.3, C93.4, 093.5 usurped power, risks due to 80.1
procedures 90.2, 90.3, 92 utilisation of resources C11.2(25), D 1 1. 2 ( 2 5 ) ,
reasons for 90.2, 91 E11.2(25)
Termination Table 90.2, 92.2, 93.2
tests/testing 40 valuable objects found within Site 6 0 . 1 ( 7 ) , 73.1
before delivery 41 visual inspection of Site 60.2
compensation events resulting 6 0 . 1 ( 1 0 ) ( 1 1 ) ( 1 6 )
Contractor's cost C40.7, D40.7 waiver by insurers 85.2
searching/notifying Defects 42.1-2 war 80.1
third party rights, contracts Act Y3.1 wastage of Plant and Materials C 1 1 . 2 ( 2 5 ) ,
time, see also Completion; Key Date: start(ing) work 0 1 1. 2 ( 2 5 ) , £ 1 1. 2 ( 2 5 )
time allowed watching tests 40.3
certification of Completion 30.2 wear to works, Employer's risk 80.1

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: weather conditions 60.1( 1 2 )

taking over 35, 43.4, 60.1(15), 80.1, X6.1, X7.1,
'
#
weather data/weather measurement 60.1(13) X16.1, X16.2
whole of the works X5.1

I Wo rks Information
Completion 32.2, 50.1, 60.1(13), 93.1-2, 020.4, acceptance/procurement procedure C11.2(25),
C53.3, 020.4, D53.7, E20.4, F20.4, X1.2, D 11 . 2 ( 2 5 ) , E 1 1. 2 ( 2 5 ) , F1 1.2(26)

I
X16.1
accounts and ecords
r C 52 . 2 , D5 2.2, E5 2 . 2,
1 Defined Cost €20.4, 020.4, E20.4, F20.4 F 52.2
t
winding-up order 91.1
and Activity Schedule A54.1, C54.1
witnesses, tribunal proceedings W1.4(6), W2.4(5) advanced ayment

l p bond X14.2
# Working Areas (working areas) 1 1 . 2 ( 1 8 ) assessing c ompensation events A63.10, B63.10
( addition 15
and Bil l of Quantities B55.1, D55.1
! Equipment, Pl ant and Mat erials outside 71.1

change(s) 14.3, 18.1, 44.1-2, 60.1(1), 63.8-9
t
# Eq uipment, P a l nt and M aterials removed from 92.2
and compensation events 60.1(1)(16), 63.8-9
%
Equipment, Plant and M aterials within 41.1, 93.1 C ompletion Da te 1 1 . 2 ( 2 )

I
Plant and Materials outside 70.1, 70.2, 7 1. 1 conditions tated
{ s in 25.1, 60.1(5)
l P lant and Ma terials within 41.1, 70.2, 93.1

Contractor's accounts a nd records C52.2, D52.2,
i
resources removed from C 11.2(25), D 11.2(25), E 5 2. 2 , F 5 2 . 2
4
%
E 11 . 2 ( 2 5 )
Contractor's design 2 1 . 1 - 2 , 22.1, 6 0 . 1 ( 1 ) , X 1 5 . 1
&
sharing with Others 25.1
Contractor's parent ompany guarantee X4.1
c
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working with Employer/Others see -
co operat on i and Defects 44.1, 44.2
}
works definition 1 1 . 2 ( 1 9 )
+
Completion of whole 11.2(13), 32.2, 50.1,
t Equipment 1 1 . 2 ( 7 )
60.1(13), 9 2.1, 93 .2, C 20 .4, C53 .3, D 2 0.4 , h ealth a nd safety 27.4
D5 3. 7, E20.4, F20.4,X1.2, X16.1
instructions that change 14.3, 18.1, 44.2, 6 0 . 1 ( 1 ) ,
f Contractor's design 21.1, 22.1, X15.1 63.8-9

'
Contractor's management responsibility for design,
+ m a r k i ng of Equipment, P lant and Materials 71.1
construction a nd installation F20.2 part of works not in accordance with 11.2(5)
i and Defects 11.2(5)
p erformance bond X13.1
design 020.3, D20.3, £20.3, F20.3
and programme 31.2
l early warn in g of possible p erformance impairment and Prov iding the W orks 1 1 . 2 ( 1 9 ) , 20.1,
+ 16.1
# C 1 1. 2 ( 2 5 ) , 0 1 1. 2 ( 2 5 ) , £11.2025)
Equ pmi ent l eft in 72.1
subcontract work F 20.2
I
information specifying/describing 11.2(19), 25.1 take over of works 35. 2
+ loss of or damage to 80.1, 82.1, 84.1
tests and inspections 40.1-2, 41.1, 42.1,
i part provid ed by Subcontractor 11.2(17) 60.1 ( 1 6 )
J P lant a nd Ma terials included 11 . 2( 1 2 )( 1 7 ) title to materials 73.2

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( section X5.1
uncorrected Defects 45.1-2
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e n g i n e e ri n g a n d

This contract should be used for the appointment of a contractor for

engineering and construction work, including any level of

OGC endorsement of NEC3

according to the objectives of the project, aiming to satisfy the

Achieving Excellence in Construction (AEC) principles.

Office ot Government Commerce

and aid the use of the NEC fa m i l y of contracts.

of your N E C d o c u m e n t s i n c l u d i n g contracts, These courses present a natural progression of

g u i d a n c e notes and fiow charts in easily knowledge, understanding and practical

Available through the NEC website, the service

uses technology that allows you to

NEC both on the development side and in

o licence NEC3 contracts for project intranets and

conferences provide an insight into the NEC family

proving guidance on the use of the NEC compansons

NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary of

The NEC is a family of standard contracts, each of which has these

• It can be used in a wide variety of commercial situations, for a wide

variety of types of work and in any location.

• It is a clear and simple document - using language and a structure

which are straightforward and easily understood.

and Construction Contract Guidance Notes, Flow Charts and Options A, B, C,

ISBN (complete box set) 0 7 2 77 3382 6

ISBN (this document) 0 7277 3359 1 I

ISBN (Engineering and Construction Contract Guidance Notes) 0 7 2 77 3366 4

ISBN (Engineering and Construction Contract Flow Charts) 0 7 2 7 7 3367 2

ISBN (Option A: Priced contract with activity schedule) 0 7 2 77 3360 5

ISBN (Option B: Priced contract with bill of quantities) 0 7277 3361 3 I

ISBN (Option D: Target contract with bill of quantities) 0 7 2 77 3363 X

ISBN (Option F: Management contract) 0 7 2 7 7 3365 6 t

First edition 1993

Reprinted November 1 9 9 5 with amendments

Reprinted with corrections May 1 9 9 8

from the British Library.

€ Copyright nec 2005 I

and Patents Act 1988, no part of this publication may be otherwise I

Typeset by Academic + Technical, Bristol I

Core clauses 1 General 3

2 The Contractor's main responsibilities 7

4 Testing and Defects 11

8 Risks and insurance 21

Main Option clauses A Priced contract with activity schedule 27

B Priced contract with bill of quantities 29

C Target contract with activity schedule 31

D Target contract with bill of quantities 34

E Cost reimbursable contract 38

Dispute resolution w Option W1 42

Secondary Option clauses X1 Price adjustment for inflation 48

X2 Changes in the law 49

X4 Parent company guarantee 49

X6 Bonus for early Completion 50

X13 Performance bond 52

X14 Advanced payment to the Contractor 52

X15 Limitation of the Contractor's liability for his design to reasonable 52

skill and care

X17 Low performance damages 53

X18 Limitation of liability 53

X20 Key Performance Indicators 54

Y(UK)2 The Housing Grants, Construction and Regeneration Act 1 9 9 6 55