NEC has released the consultation draft of the new NEC4 Alliance Contract (ALC), one of four additions to the NEC suite.
The ALC is a multi-party contract with an integrated risk and reward model. However, it largely follows the same principles of other NEC4 contracts, with familiar provisions, management processes and terminology.
NEC said it has been published initially in a consultation form to allow feedback from users to ensure that it meets the needs of the industry.
Ian Heaphy from the NEC4 Contract Board said: ‘The reason why we created the Alliance Contract was the fact that there was a need to have a more collaborative contract, whereby we have a single contract form that all members of the supply chain can sign up to, including the clients. A performance based contract with shared risks, shared responsibilities and aligned objectives.’
NEC contracts allow all members of the supply chain to be engaged on similar terms and conditions. These have previously been bi-party arrangements and NEC users requested the development of a distinct alliancing form in which all participants can be engaged under a single multi-party contract.
The basis of the ALC is that members of the Alliance work together in achieving client objectives, and share in the risks and benefits of doing so.
The members of the Alliance will work together as an integrated team, where an Alliance Board manages it on behalf of the members. Any decisions on the Alliance Board need to be unanimous.
NEC4 introduces four new contracts to the NEC suite: the NEC4 Design Build and Operate Contract (DBO), the NEC4 Professional Services Short Contract (PSSC), the NEC4 Supply Short Contract (SSC) and the ALC.
This fourth evolution of the NEC suite of contracts, released last month, will play a key role in setting the built environment sector on the path to a critical digital ‘industrial revolution’, according to Dr David Hancock, head of construction at the Cabinet Office.
Dr Hancock added that NEC4 is ‘central to strengthening the Government’s capability as a construction client’ and that the suite’s central themes of collaboration and shared understanding towards efficiency and risk management are key if ‘we are to enter new era of true manufacturing capability’.
Beth West, NEC Users’ Group chair,said: ‘NEC contracts provide a toolkit to resolve issues with common sense language, collaborative working and risk management. It is up to us to come together and use this to our advantage. This contract requires you to think and act in a certain way to get success – collaboratively.’
NEC4 is now available to purchase online. For all the latest up to date information visit https://www.neccontract.com/NEC4-Products/NEC4-Contracts