PSC Main Options

NEC4 PSC Option A is a priced contract with an activity schedule, and it sits alongside Option C (target) and Option E (cost reimbursable) as the three main Options in the Professional Service Contract. NEC3 had four: A, C, E and G, and its Options C and E paid on Time Charge instead of Defined Cost plus the Fee.

The letters look familiar from the works contracts, but there are no B, D or F Options in the PSC, and a consultant's payment works differently in some important ways. For the works side, see the NEC main Options overview. For the contract itself, see the guide to the NEC4 Professional Service Contract.

NEC4 and NEC3 side by side

Option	NEC4 PSC	NEC3 PSC
A	Priced contract with activity schedule: lump sums paid as activities finish	Same idea: lump sums paid as activities finish
C	Target contract: Defined Cost plus the Fee, with a share against the activity schedule total	Target contract: Time Charge for completed work, with a share against the activity schedule total
E	Cost reimbursable contract: Defined Cost plus the Fee, no share	Time based contract: Time Charge, no share
G	Not available	Term contract: see the Option G guide

The NEC4 Professional Service Subcontract (PSS) offers A, C and E too, with the Contractor in the roles of the paying party and manager.

Who does what on payment

	NEC4 PSC	NEC3 PSC
Who administers the contract	The Service Manager	The Employer directly
Who assesses the amount due	The Service Manager	The Consultant
What's issued	A certificate (51.1), followed by the invoice from the Party owed the money	The Consultant's invoice (no certificate)
Expenses	Part of the amount due under 50.3	Part of the amount due under 50.3

Anyone moving from NEC3 to NEC4 consultancy appointments should re-read the payment section. The role of the Service Manager and the certificate are real changes in everyday procedure.

Option A in practice

Under NEC4 PSC Option A, the Consultant is paid each activity's lump sum once it's complete. Payment doesn't follow hours spent, so a design stage that took longer than priced is the Consultant's loss, unless a compensation event applies. Expenses are forecast separately.

The PSS text states that compensation events under its Option A use the Short Schedule of Cost Components and People Rates. Check your own PSC for the same rule before you price on that basis.

A fictional example, with illustrative figures. A flood study has three activities: data collection (£24,000), modelling (£52,000) and final report (£18,000). At month 2, data collection is done and modelling is about 70% complete. So the Price for Service Provided to Date stands at £24,000. Long activities leave a Consultant carrying months of unpaid staff cost, so stage the work with care. The general principles in the Activity Schedule guide apply.

Option C in practice

The Consultant is paid forecast Defined Cost plus the Fee, then shares the difference from the target. The share clauses are 54.1 to 54.3 in the NEC4 PSC, with the assessments made only after Completion of the whole of the service and in the final assessment. Under NEC3, payment was the Time Charge and the share sat at C54.1 to C54.4.

A target suits work with some uncertainty, such as a design commission where the Client wants to reward early problem-solving. A worry for smaller consultants is a Disallowed Cost test and open-book records they've never had to keep before. The PSC's definition is at C11.2(18), which is close in spirit to the ECC's. Plan the records before you agree to it. More on shares is in target cost and the Contractor's share, which is written for the ECC but explains the same calculation.

Option E in practice

Option E is well suited to advice, investigation or support where the extent isn't known. The Client pays Defined Cost plus the Fee, with Disallowed Cost at E11.2(18). The Client's control comes from regular forecasts, staff selection and reviewing the Scope. NEC3's version is the same in concept, but with Time Charge as the basis.

Secondary Options that vary

The PSS text limits X1 (inflation) to Options A and C and X3 (multiple currencies) to Option A. Look for the same restrictions in your PSC. NEC3's PSC numbers its X1 clauses separately for each main Option, so don't cite a single NEC3 X1 clause without checking.

Choosing

Your position	Likely Option
Clear deliverables, confident in the effort involved, Client wants a fixed fee	A
Reasonable idea of the work, some unknowns, both sides want to share the outcome	C
Open-ended advice, emergency support or a scope that can't be defined yet	E
A period of ad hoc call-off work under NEC4	Consider the Term Service Contract

Want more on how consultants run these contracts? See professional services under NEC and the Consultant under the PSC.

Related guides

• NEC Main Options: A to F Explained
• TSC Main Options
• Setting Share Ranges and Percentages
• NEC Option G Term Contracts: What It Means

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.