Correctly preparing contract data Part One and Part Two are fundamental to contract success, so are crucial to get right. Dr Stuart Kings – NEC drafter and expert – explains why, as well as considering practical tips, highlighting common pitfalls, and looking at the key changes introduced with NEC4.
The importance of contract data
Contract data sits at the heart of the NEC Engineering and Construction Contract (ECC). It provides the project-specific information that underpins the whole agreement, covering the main and secondary Options selected as well as details of Scope and Site Information.
While many are still migrating to NEC4, launched in 2017, it is crucial to use the most up-to-date material, drawing on the amendments available on the NEC website. Relying on a static library copy risks missing important updates or changes in case law – though it is worth stating that many of the lessons discussed in this piece also apply to those who remain working with NEC3 contracts, especially given the long-term nature of many projects.
Making the best use of guidance
One of the most valuable tools in preparing contract data is Volume Two of the NEC guidance, Preparing an Engineering and Construction Contract. Section 2.2 contains a detailed checklist for every Contract Data entry, explaining the purpose of each item, the guidance to follow, and example entries.
This resource is essential in ensuring nothing is overlooked, but it is not a substitute for thinking carefully about the specific needs of the project. Simply copying example text can create problems later, so entries must be tailored to reflect the precise circumstances of the contract.
Part One of the Contract Data is completed by the Client and Part Two by the Contractor. Both must be completed in full, including any additional Z clauses, which should appear at the end. NEC4 also consolidated the idea of “Scope,” which had previously been split across different contract types under NEC3.
A well-structured and clearly referenced Scope not only strengthens the contract but also benefits those in the supply chain. When Scope documentation is logical and easy to follow, recipients engage with more confidence – improving tender responses and pricing.
Pitfalls to avoid
Incomplete or poorly drafted Contract Data can have serious consequences. For example, imagine a scenario where a Client includes the Defects Dates but overlooks the defect correction period. In this case, the Contractor would automatically be bound to the default 52-week period, creating unnecessary tension during delivery.
Errors in Option selection are another common source of dispute, particularly where the main Option and dispute resolution choice do not align with the secondary Options selected. Even small oversights – such as failing to state whether the Client will take over the works before completion – can leave the Contractor exposed to ongoing risks like security obligations.
Payment cycles also cause difficulty. Under ECC Y(UK)2 the default is 21 days. Many often assume a 28-day cycle, so unless this is amended and made explicit, Clients can be caught out.
Key changes in NEC4 entries
NEC4 brought several refinements that should not be overlooked. The Early Warning Register replaced the old Risk Register, helping to avoid the misconception that it reallocated risks rather than identifying them. The new approach encourages early dialogue, and regular early warning meetings are now mandatory. These can take place virtually, provided that proper records are kept.
The contract also allows parties to include additional compensation events, such as the discovery of asbestos. However, care must be taken to draft these clauses in a way that is legally robust and not open to interpretation after the contract is signed.
Working Areas have also been clarified. Costs are only recoverable within the areas defined in the contract, but recent amendments now allow for support staff working remotely to be included where timesheets provide the necessary evidence. In addition, templates can be adapted to extend reply periods for certain submissions, such as complex design reviews, to reflect realistic project needs.
Setting projects up for success
Carefully prepared Contract Data helps to reduce disputes, improves clarity, and provides the foundation for successful delivery. Working from the latest NEC amendments, using the guidance effectively, and ensuring every entry is completed with precision are the hallmarks of a strong contract.
NEC4’s refinements, from the Early Warning Register to the improved approach to Scope, should be seen as opportunities to enhance contract management rather than administrative burdens. Tools like Sypro provide a practical way to manage these updates efficiently, keeping teams aligned and informed throughout the project lifecycle.
Watch the full webinar with Dr Stuart Kings here, or request a Sypro demo to see how these best practices can be applied in real projects.
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