The NEC4 Term Service Contract (TSC) is used to appoint a Contractor to provide a service over a Service Period, such as maintaining a road network, buildings or plant. A Service Manager runs it for the Client, and specific work is called off by Task Orders.
The biggest shift from the ECC is that nothing here works toward one finish date. Time is managed task by task. For how it sits among the other NEC contract types, the closest comparison is ECC vs TSC.
Key terms
| Term | Meaning in plain English |
|---|---|
| Service Manager | Does what the Project Manager and the Supervisor do in the ECC |
| Affected Property | What the service is carried out on |
| Service Areas | Where the Contractor works |
| Service Period | The term of the contract |
| Task | A defined piece of work within the service. See what a Task is |
| Task Completion Date | The date for one Task, in its Task Order |
| Plan | The Contractor's programme for the whole service |
| Price for Service Provided to Date | The term form's version of the ECC's Price for Work Done to Date |
Task Orders
Clause 19 is the heart of the form. A Task Order is the Service Manager's instruction to carry out a Task, with the work and dates described and any delay damages stated. The Service Manager can ask for a quotation first (19.1). Issuing a Task Order isn't a compensation event, but changing a Task is (60.1(1)). The separate guide to Task Orders under NEC term service contracts covers pricing and day-to-day management.
The plan
A first plan goes in for acceptance within the period in the Contract Data unless one is already identified (31.1). Its contents are at 31.2, and include each Task with its dates. The Service Manager replies under 31.3, which also deals with what happens if there is no reply. Revisions come under 32.1 and 32.2. Each Task may also need its own Task Order programme (clauses 33 and 34). If no plan is identified, one quarter of the running total (the Price for Service Provided to Date) comes off each assessment until a first plan arrives (50.5).
Main Options
There are three: Option A (priced contract with Price List), Option C (target contract with Price List) and Option E (cost reimbursable contract). See TSC main Options. On Options A and C, a final quantity that differs from the Price List can be a compensation event in stated cases (60.2).
The TSC also has its own secondary Options: X19 for termination by either Party, X23 for extending the Service Period and X24 for accounting periods. It doesn't have X5, X6, X7, X9, X14, X15, X16 or X22. In NEC3, X19 meant Task Orders; in NEC4 they are core, so don't confuse the two.
Compensation events
The TSC has 18 core events, and they aren't in the ECC's order.
| New or different in the TSC | TSC event |
|---|---|
| Access to the Affected Property not given | 60.1(2) |
| A Task Order reaching the Contractor later than its starting date | 60.1(4) |
| A change to the Affected Property | 60.1(11) |
| A corrected mistake in the Price List | 60.1(16) |
| A quotation for a proposed instruction turned down, or a Task that won't be instructed | 60.1(17) |
There is no physical conditions, weather, objects of interest, take over, search or prevention event. A Contractor used to the ECC needs to price for those risks with that in mind.
Other differences from the ECC
- Tests. The Service Manager does what the Supervisor does in the ECC.
- Defects. There is no defects date or Defects Certificate. Defects are notified at 43.1 and put right quickly enough to limit the harm (43.3), which also covers what happens if they are left uncorrected.
- Payment and close-out. The same numbers as the ECC, but the final assessment under 53.1 follows the end of the Service Period.
- Early warning. The matters are a higher total of the Prices, disruption to the timing of the service, the service becoming less effective, and the Contractor's own cost.
What people get wrong
- Treating a Task Order like a contract variation. It's the normal way work is ordered, not a change to the deal.
- Letting Task Orders run late. A Service Manager who backdates orders creates events under 60.1(4).
- A poor Price List. Everything depends on it. Items that don't match how work is really ordered lead to quotations for almost every Task.
- Not considering the FMC. For facilities services, look at the NEC4 Facilities Management Contract as well.
Related guides
- NEC Contract Types: Which Form Do You Need?
- NEC4 Term Service Subcontract (TSS)
- NEC4 Term Service Short Contract (TSSC)
- NEC4 Supply Contract (SC)
- NEC4 Professional Service Subcontract (PSS)
- NEC4 Professional Service Short Contract (PSSC)
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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.