An NEC contract is a standard-form contract from the NEC family, used mainly for construction, engineering, services and supply work. If you're asking what is an NEC contract because you've been handed one, it's most likely the Engineering and Construction Contract (ECC), which sets out how the Client, Contractor and Project Manager deal with time, money and risk.
Unlike contracts that mainly record who owes what, NEC builds project management procedures into the agreement. Both sides agree in advance how they'll handle problems and change. For how it compares to other forms, see the comparisons section.
The key facts
| Owner | The Institution of Civil Engineers (NEC is one of its divisions) |
|---|---|
| First published | 1993, after a consultative edition in 1991 |
| Editions in use | NEC4, published in June 2017, and NEC3 from 2005, which continues on many existing contracts |
| Covers | Works, professional services, term services, supply, and related subcontracts |
| Most used form | The Engineering and Construction Contract |
| Payment methods | Priced, target, cost reimbursable and management, depending on the form |
| Where seen | UK infrastructure and public sector work especially, with other sectors and countries too |
What makes NEC different
Four features set an NEC contract apart. Clause numbers here are from the NEC4 ECC.
- Warn early. Either side notifies the other as soon as it knows of something that could hurt cost, time or performance (15.1). In NEC3 this is 16.1.
- Keep the programme live. The Contractor submits a detailed programme and keeps revising it (31, 32). It's used to work out delays.
- Handle change as it happens. Events that aren't the Contractor's risk are compensation events, priced and assessed as the job goes along.
- Stick to the time limits. The Contractor and the Project Manager have periods to act in, and being late has consequences.
What an NEC contract isn't
- It isn't one price type. "An NEC contract" doesn't tell you if it's fixed price. Under Option A, the Contractor prices activities, while under Option E, it's paid its cost plus a Fee. Always ask which main Option is used.
- It isn't a single document. It's made up of clauses from the NEC book, plus the choices and details for that job. See how an NEC contract is structured.
- It isn't just for civil engineering. It has roots there, but it's also used for buildings, maintenance and professional services.
- It isn't automatically collaborative. It asks for mutual trust and co-operation (10.2), but the people involved make that happen.
- It isn't generally required by law. A policy or framework might require it. See who has to use NEC.
How to tell which NEC contract you have
Look at the first page of the Contract Data or the contract agreement, and find these four things:
- The edition. NEC3 or NEC4, and the date. An NEC3 document will say Employer, whereas NEC4 says Client.
- The form. ECC, ECS, PSC, TSC, or a short contract.
- The main Option. For the ECC, it will be A to F.
- The other Options. The dispute option, the X and Y secondary Options and any Z clauses that change the standard terms.
That gives you what you need before you read further. If this is your first NEC job, the next step is NEC contracts explained for beginners.
Related guides
- NEC vs Other Construction Contracts
- NEC Contract Meaning
- What Does NEC Stand For?
- NEC Contracts Explained for Beginners
- Who Has to Use NEC?
- NEC Outside the UK
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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.