NEC3 Option A is the April 2013 ECC's priced contract with activity schedule: the Contractor is paid its lump sum for each activity when that activity is completed. Many NEC3 contracts are still running or being closed out, and their clause numbers and rules differ from NEC4 in ways that matter.
This page sets out those rules for anyone working on an NEC3 job. The main principles are explained in the guide to NEC Option A. For how all the Options compare, see the main Options section.
Clause finder for NEC3 Option A
| Clause | What it does |
|---|---|
| 11.2(20) | Defines the Activity Schedule, which can be changed only under the contract |
| 11.2(22) | Defined Cost means the Shorter Schedule components, subcontracted or not, without the cost of preparing quotations |
| 11.2(27) | Price for Work Done to Date: finished activities and finished groups of activities |
| 11.2(30) | The Prices are the schedule's lump sums |
| 31.4 | Shows how activities relate to programme operations |
| 36.3 | Acceleration changes the Prices, Completion Date and Key Dates, and the Project Manager accepts the revised programme |
| 54.1 | Schedule information isn't Works Information or Site Information |
| 54.2 | A discretionary change of method needs a revised schedule |
| 54.3 | Reasons for not accepting a revised schedule |
| 63.10 | When a reduction in Defined Cost reduces the Prices |
| 63.12 | Changed Prices are shown as changes to the schedule |
| 63.14 | Rates and lump sums can be used if both sides agree |
| 65.4 | The implementing notification includes the changes to the Prices and dates |
| 93.3 | On termination, grouping is ignored |
The rules that differ most from NEC4
The completed activity test is wider
Under NEC3, an activity isn't complete if it has Defects that would delay immediately following work or be covered by it. Notification isn't part of the test. So a Project Manager assessing payment can treat an activity as unfinished for a Defect that would be built over, even one with no effect on timing. Under NEC4, the test turns on notified Defects that will delay following work.
Savings from Contractor ideas go to the Employer
Under A63.10, if a change to the Works Information reduces total Defined Cost, the Prices come down. So does a correction of an assumption the Project Manager stated when assessing an earlier event. That covers a change the Contractor suggested. In other words, on the wording of the clause, a Contractor who proposes a cheaper way to meet Employer's requirements hands over the assessed saving, whereas NEC4 lets it keep a share. If a change would benefit both, the parties should discuss how to deal with that in the assessment.
Here's a small example with illustrative figures. A proposal changes the Works Information and is assessed as £30,000 cheaper. Under NEC3 A63.10, the Prices fall by £30,000. Under NEC4 63.12, at the default percentage, they would fall by £15,000.
A wider Project Manager acceptance test for revisions
Under 54.3, the Project Manager can refuse a revision because it doesn't comply with the Accepted Programme, or because changed Prices aren't reasonably distributed between the activities. NEC4 limits redistribution to activities not yet completed. NEC3 doesn't say this in terms, but moving money into activities you've already been paid for would raise the same concern.
No People Rates term
NEC3's Shorter Schedule of Cost Components uses data in Contract Data part two rather than a defined People Rates term. The name changed to "Short" in NEC4.
Words to use on an NEC3 job
Get these right in correspondence, because using NEC4 words on an NEC3 contract causes confusion:
- Employer, not Client (see Employer vs Client).
- Works Information, not Scope (see Works Information vs Scope).
- Risk Register and risk reduction meetings, not Early Warning Register and early warning meetings.
- Shorter Schedule of Cost Components, not Short.
Checks for closing out an NEC3 Option A contract
- Has every activity reached completed status, including those added by compensation events?
- Do all implemented compensation events appear on the current Activity Schedule, and does its total match the certified total of the Prices?
- Do you have a current Accepted Programme that ties to the schedule under 31.4?
- If a contract moved from NEC3 to NEC4 templates partway through your organisation's process, check your letter templates don't cite NEC4 numbers. The NEC3 main Options summary can help.
Related guides
- NEC Main Options: A to F Explained
- NEC3 Option C: What to Know
- NEC3 Option E: What to Know
- Option A vs Option C
- NEC4 Option D: What to Know
- NEC4 Option E: What to Know
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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.