NEC: sustaining the Olympic effect STEVE ROWSELL NEC USERS’ GROUP CHAIRMAN


Last summer’s London 2012 Olympic and Paralympic Games were a fantastic success and have been acclaimed around the world as possibly the best-ever games. They could not have happened without the


wonderful NEC-procured stadia and venues, the successful delivery of which is something of which the UK construction industry can be very proud. In a recent BBC television interview (see


separate article), Olympic Delivery Authority chairman Sir John Armitt identified that the key to that success was use of the NEC3 suite of contracts to procure the main stadium and other venues and infrastructure in the Olympic Park. He also stressed the importance of relationships. As NEC users, most of us will be familiar with


clause 10.1 in the Engineering and Construction Contract, which sets out the requirement for parties to act in a spirit of mutual trust and cooperation. It is easy to take this requirement for granted and assume that anybody willing to enter into an NEC3 contract is capable of acting in this way. Unfortunately this is not always the case.


Ensuring capability How is trust developed? Some people need


to build up relationships over a period of time


before they can fully trust others, but this may not be a possible when working with a new supplier. The alternative is simply to trust the other party from the outset until they do something which undermines that trust. This is helped if each party has confidence in the other party and in the team and individuals who have been brought together to deliver the contract. This in turn requires that the client has adequate capability to understand what is required to deliver a successful project and is able to deliver robust procurement procedures which allow the ‘best’ suppliers to be appointed. The best suppliers will not normally be


appointed where the contract award criterion is the lowest price. That approach is likely to result in cost overruns, claims and disputes. The best suppliers are those who will help the client develop optimal solutions, manage risks effectively and deliver the requirements as efficiently as possible. It is not just the main contractor that needs to have the capability to act as required in a collaborative culture. It is the whole supply chain which plays a vital role in managing risks and adding value through their skills and capabilities. Trust needs to extend into the whole supply chain. What happens when the client does not have


sufficient capability or their capability is not effectively applied? In the worst case you will get situations like the UK West Coast Mainline rail franchise, where the procurement process


NEC projects again dominate British Construction Industry Awards


SIMON FULLALOVE EDITOR


Projects procured by NEC contracts again dominated the annual British Construction Industry Awards at the end of 2012, taking five category winners and two highly commended – more than any other form of contract. The awards included the main prize for the


application of building information modelling (BIM) as well as those for the impact on society, environment and regeneration categories. Of the remaining winning and highly commended projects, six were procured by JCT, three were by bespoke contracts, one was IChemE and one was based on ICE conditions.


BIM award The BIM Project Application Award, which


was for the team that demonstrated the most innovative and forward-thinking use of BIM techniques which delivered the greatest added value to client, went to the Victoria Station upgrade team of London Underground, Mott MacDonald and Taylor Woodrow-Bam Nuttall. The £700 million project, which started in


2010 and is due for completion in 2018, is being procured under the NEC Engineering and Construction Contract (ECC) option C. The judges said the BIM solution was, ‘a true multi- layered model that goes way beyond 3D design functions to become the single source of truth


on the project’.


Other awards The new NCE 40th Birthday Award, which


was for projects with the greatest positive impact on UK society, went to the Olympic Delivery Authority for its £7 billion worth of NEC3-procured venues and infrastructure for the London 2012 Olympic and Paralympic Games. The £49 million White Cart Water flood


prevention scheme in Glasgow, delivered for Glasgow City Council under ECC option A, won the environmental award while the regeneration award went to Bradford City Park, a £25 million urban water park delivered under ECC option C for City of Bradford Metropolitan District Council. Other winning and highly commend NEC3


projects included the £1 million Taunton Third Way Bridge for Somerset County Council (ECC option B), the £88 million M53 Bidston Moss Viaduct Strengthening Project for the Highways Agency (ECC option C) and the £11 million Peace Bridge, Londonderry for Ilex (ECC option C).●


2 NEC USERS’ GROUP NEWSLETTER•No.61•JANUARY 2013


had to be abandoned. If a contract is awarded to an inappropriate supplier then it is likely that inappropriate behaviours will emerge and the reputation of the client, the supplier, the industry and the form of contract is put at risk.


Clarifying requirements A vital part of NEC3 contracts is the works


information and this is another area where intelligence and capability need to be applied. We see too many contracts where works information is not well developed at the outset. The potential consequences are a lack of clarity in requirements, uncertainty about risk allocation and the likelihood of significant change. On occasions these circumstances will put the contract control procedures under pressure and put the reputation of the contract at risk even though the fault does not lie with the contract. NEC3 contracts are riding on the crest of the


wave following London 2012. As NEC users we must work hard to ensure that we continue to identify and mitigate risks which may otherwise damage the contract suite’s hard-won and well- deserved reputation. ●


For further information please ccontact the author on +44 7930 323749 or email steve.rowsell@rowsellwright.com.


BBC programme praises NEC


SIMON FULLALOVE EDITOR


A BBC television programme has described the NEC3 suite of contracts as the ‘hero’ of the London 2012 games. Reporting on the success of the Olympic Park


construction works, Built in Britain presenter Evan Davis said on BBC2 in October, ‘behind the scenes there was a secret to that success ...the hero of the games, the hero of the Park, was the NEC’. He asked Olympic Delivery Authority chairman


John Armitt if the project would have been delivered as successfully if he had used a different contract form. Armitt replied , ‘No, I don’t think it would, you couldn’t do it’.


Transforming infrastructure delivery Davis then said, ‘So, it was a document that won


it, a template for setting out the responsibilities of contractors and customers. A contract that has so far sorted out some the arguments so prevalent in earlier years. It’s been credited with turning around how infrastructure is delivered, not just at the Olympics, but in the UK. ‘ Citing NEC’s major successes over the past 15


years, Davis concluded, ‘My theory is we are on the cusp of a golden age here, we’ve got High Speed 1, that went pretty well, this [London 2012] went pretty well, Terminal 5 went pretty well, have we cracked it?’ Armitt replied, ‘There is an enormous


opportunity, and this and other projects have shown the public and shown the politicians what we can do.’ ●


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