The main disadvantages of an NEC contract are the administrative workload, the short time limits and the risk of a procedure-heavy contract being run badly. Those problems are real and you can plan for them, but they don't go away just because a contract is well regarded. NEC suits teams that are ready to run it, and it can go badly for teams that aren't.
The points here are about the NEC4 ECC unless stated. Weigh them against the advantages of NEC contracts and our broader comparison of NEC and other forms.
The disadvantages, and what helps
| Disadvantage | Why it causes trouble | What helps |
|---|---|---|
| Heavy administration | Notifications, quotations, programmes, registers and replies all produce work, even on small jobs | Resource it from the start. Use a shorter form, such as the ECSC, where the job allows it |
| Short time limits | Three weeks to quote and two weeks to reply (62.3) can be tight on complex events | Agree an extension before the period ends where needed (62.5), and track the dates |
| Severe consequences for lateness | The Contractor can lose entitlement under 61.3, and silence can lead to deemed acceptance under 61.4, 62.6 and 64.4 | Have a daily check on what's due and give clear authority to reply |
| Forecast-based assessment | Events may be priced before their full effect is known, and the result generally isn't reopened (66.3) | State assumptions under 61.6 where the effect is too uncertain to forecast sensibly |
| Unfamiliar language | The present tense and defined terms can leave a reader unsure who has to do what, and short wording can leave gaps | Train on the actual contract and get advice on anything unclear |
| Amendment risk | The clauses interlock, so a Z clause in one place can upset another procedure | Keep Z clauses minimal, and test them against the core clauses. See common Z clause mistakes |
| Dependence on the Project Manager | A stretched or inexperienced Project Manager can hold up the whole contract | Check real availability, and name a deputy for absences |
| Supply chain unfamiliarity | Smaller firms may price the unknown or fail to follow the procedures | Offer briefings and simple templates, and set out expectations in tender documents |
How the workload adds up
A fictional £5 million Option A job with illustrative numbers shows the point. Over 18 months, suppose the team deals with:
- 60 compensation event notifications, most with a quotation and a reply, and some with a revised quotation
- 18 programme revisions, if the Contract Data asks for monthly submissions
- 18 monthly assessments and payment certificates
- Regular early warning meetings, with an updated register each time
That's several hundred separate, time-limited communications, even for a job of moderate size. If a Project Manager spends two days a week on it, some replies will be late. The contract is no harder to understand for being busy, but the volume is what hurts. It's worth running this calculation before you tender or price.
Disadvantages by viewpoint
For clients
Your own team's delays have direct commercial consequences. If your approval chain is slow, late replies can become compensation events under 60.1(6). Cost-based Options also require auditing resources, which can be easy to forget. Budgeting for the form means budgeting for that.
For contractors
You will need commercial and planning staff working on the contract throughout. Quotations must be worked up on Defined Cost and a forecast, which takes time, and the cost of doing so isn't always easy to recover. The time bars are unforgiving if your site team doesn't report things quickly.
For subcontractors
A subcontract's periods can be shorter than the main contract's, and your paperwork may be new to you. A contractor who passes on an amended NEC form may also shift more risk than the standard form does. Read the Subcontract Data carefully.
Common complaints that are only half true
- "It's just more paperwork." Many of the same issues would arise under any form, but NEC makes you deal with them now. Some of this workload is simply brought forward.
- "NEC favours contractors." Compensation events can look that way, but Options and the time bar also place real risk on the Contractor.
- "The language is vague." Some of it does need interpreting, which is why definitions and advice matter. Most day-to-day procedures are clear once they're understood.
When to think again about NEC
You might choose something else if no one on the client side can give it the time, if your job is small and simple with no shorter NEC form suitable, or if your supply chain has no experience and the programme leaves no time to bring them up to speed. If the form is already fixed by your framework, focus instead on avoiding the common mistakes.
Related guides
- NEC vs Other Construction Contracts
- NEC and Public Sector Procurement
- Who Has to Use NEC?
- NEC Outside the UK
- NEC PSC vs Other Consultancy Appointments
- Advantages of NEC Contracts
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This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.