have an account?【sign in】Types of NEC Contract Options:Understanding the Different Types of NEC Contract Options
hallmanauthorThe NEC (New Civil Engineering) contract is a popular construction contract in the United Kingdom and other countries. It is used for large-scale projects and provides a comprehensive framework for project management, risk allocation, and cost control. One of the key features of the NEC contract is the use of contract options, which allow the parties to adapt the contract to the changing circumstances of the project. In this article, we will explore the different types of NEC contract options and their implications for project management.
1. Flexible Dates
One of the most common types of contract options in the NEC contract is the flexible date option. This option allows the parties to adjust the schedule of the project by changing the dates for completion or key project milestones. Flexible dates can be particularly useful in managing the risk of unforeseen delays, such as weather-related delays or supply chain disruptions. However, it is important to consider the impact of flexible dates on the project's overall cost and schedule when using this option.
2. Variation Orders
Variation orders are another common type of contract option in the NEC contract. They allow the parties to modify the contract documents by making changes to the work or terms of the contract. Variation orders can be used to address changes in the project's requirements, such as new requirements from the client or changes in the project's scope. However, it is important to ensure that variation orders are carefully managed to avoid unnecessary cost and delay to the project.
3. Extension of Time (ET)
An extension of time (ET) option allows the contractor to request additional time to complete the project due to unforeseen delays or other circumstances beyond their control. ETs are typically used for weather-related delays or supply chain disruptions. However, it is important to consider the impact of ETs on the project's overall cost and schedule when using this option.
4. Cost Incrementing
A cost incrementing option allows the contractor to request additional payment for costs that are incurred due to unforeseen delays or other circumstances beyond their control. This option is typically used for weather-related delays or supply chain disruptions. However, it is important to consider the impact of cost incrementing options on the project's overall cost and schedule when using this option.
5. Option to Treat as Variation
An option to treat as a variation option allows the contractor to request additional payment or time for changes to the project's requirements, rather than as an extension of time or cost incrementing. This option can be particularly useful for changes in the project's requirements, such as new requirements from the client or changes in the project's scope. However, it is important to consider the impact of option to treat as a variation options on the project's overall cost and schedule when using this option.
The use of contract options in the NEC contract is crucial for managing the risk and flexibility of large-scale projects. Understanding the different types of NEC contract options and their implications for project management is essential for successful project delivery. When using contract options, it is essential to consider the impact on the project's overall cost and schedule and ensure that options are used responsibly and efficiently.