8/13/2019 The New Engineering Contract_a Promising Start Briefing

1/2

the Heathrow ExpressTunnelling worksorail link are amongthefirs t to benefitfrom the non.adversarial approachof the NEC

The New Engineering Contracta promising startMartin Banes chairman of the ICE panel for theNew Engin eering Con-tract, reports on the no n-adversarial contracts encouraging first year andintrodu ces professional services version which is also suited toCCT.What do the following haven common?

HeathrowExpress,main unnelsDustbunkermodification,DraxpowerPeninsula Hotel,BangkokHappyValleyRacecourse edevelopment,LeemingBar WastewaterTreatment700 medium and low voltage electricity dis-

s tation

Hong KongWorks, Yorkshiretribution contracts, South Africa

The answer is tha t these are a l l contrac tsowunder way or completed using theew Engin-eering Contract. They il lustrate the worldw idespread which it has achievedn a short timeand also the varietyf construction projects towhich it isbeing applied. Th e Happy V alleyapproxim ate value of L64 million, which isRacecourse development in Hong Kong ha s antopped by the PeninsulaHotel in Bangkok withan approximate valueof L100 million. At thesmall end of the scale, we have theeeming BarWas tewater Treatment Works a t1 65million,the Coal Unloading plant a t Aberthaw PowerSta tion a t 4 million and the Stand develop-ment at Gatwick Airport at LO.8 million.

to be a pplied to all typesf engineering andThe New Engineering Contract was designedconstruction and it is encouraging that its earlyuse illustrates this. The PeninsulaHotel inBangkok is highly complex, highly servicedbuilding project for a luxury otel 4 storieshigh. In Belize, on contract financed by theODA, the NEC is be ing used for roa d c onstruc-tion projects being carried out byocal contrac-tors.launched at ceremony at th e CE in Londont is only just over a year since theEC wasand already its versati l i ty is being fully demostrated. Clients for projects are choosingECbecause of the stim ulus to ood project m an-agement which it offers and the opportunity toget things designed and built without theadversarial att i tudes which have come to beassociated with traditional forms f contract.Early scepticism is being replaced by positivereactions by contractors w ho have actuallycarried out work under theew contract. Thereare minor teething troubleswhich people arehappy to overcomen order to secure theadv anta ges which the NEC, in practice and inprinciple, offers.The construction industry,n particular the

8/13/2019 The New Engineering Contract_a Promising Start Briefing

2/2

BRIEFINGbuilding sector , has given aot of attentionover the past twelve months to SirichaelLathams investigation into th e sh ortcoming s fconventional management and contractualsystems. I t is e ncouraging or the ICE, a sspon sor of the deve lopm ent f the New Engin-eering Contract, that many f the sub missionsto SirMichael Latham recommend that he takesthe New Engineering Contract seriously s apossible way forward for the constructionindus t ry as awhole.The team put together by theCE to design,develop and draft theNEC rem ains in existenceto deal with technical issues aris ing from theuse of the NEC and to o verse e th e d esign anddevelopm ent of exten sions to th eNEC fam ily ofcontracts . The work f this panel includes pro-duction of the Pro fessional S ervices C ontractwhich is nearingcompletion. This is an EC-style contract with the same simplicityf struc-ture and language s the NEC, but i t isdesigned to be used for all ty pesof professionalappointm ent. T hese include the ap pointmen t fdesigners , project manag ers , supervisors andadjudicators towork alon gside the NEC con-struction contracts . The Professional ServicesContract can also be used for professionalappointments when NEC is not being used forconstruction.I t is also intended that thisersion of theNEC shou ld be used for compu lsory competi-tive tende ring CCT) contr acts in the publicsector . This further extensionf its influence

ha s been se cured as a result of cooperationbetween the ICES NEC Panel and the variousrepres entativ e bodies who are involved withthe implementationof the CCT.Furth er dow n the ine of development, butwith an expectation f early publication, are a nNEC-style contract for su rvey and investigationwork and ano ther for supply-only contracts .When these are publis hed, the EC family willbe complete and all aspe cts f engineering con-struction and its surrounding professionalactivit ies will be able to reap the benefitsfNEC-style manag ement. TheNEC survey andinvestigation contract is inte nded to e used forsite investigation, marine and estuarialsurveys, land surveys, traff ic surveys and,indeed, any type of contract for gathe ring andanalysing data, with r without testing.The New Engineering Contract was manyyears in the preparation but, af ter onlyne yearof avail ability for general use, the tak e-up isextremely promising and the extensionf itinto new areas is forging ahe ad fast . A usersgroup hasbeen set up to e operated y NECusersfor NEC users . I ts chairman isDavidWilliams, Projects Director at BAA. Everybod ywho is using NEC as client, c ontractor, pro-fessional consultantor subcontractor shouldjoin. The interactionbetween mem bers of theusers group is intend ed to elp people toprogress along the learning curve fast and toprov ide feedback t o the ICE of experience inuse.

Competing through innovationUK construction professionals could double their competitiveness withinten years by beingmore innovative, saysPeter Bransby DirectorGeneral of the Construction Industry Research and Information Associ-atio n (CIRIA).UK construction is both important and suc-cessful. It accounts for one-tenth f the UKsGDP, one-third of i ts man ufacturin g base andhalf of all its fixed investm ent. The value fconstruction work carried out abroadby UKcompanies increased toL2 4 billion in 1993,while consulting e ngineers increas ed their o ver-seas earnings toL603 million, second only tothe USA.To survive and grow, the K constructionindustry must improve the satisfaction it givesto clients and enhance i ts international competi-tiveness. In partic ular, UK construction mustfind a way of providing unique added value.Competition will come from countries withlower labour costs and sharply improving edu-cation and technology, The intensityf com-petit ion is i l lustratedby the average dailywages in manufacturing: US 90 in Europe andthe USA, US 7.50 in Mexico and Eas tern

Europe andUS 2 in China and India. Thefuture looks truly daunting, given presentthreats from the A sian tigers , where wages areabou t half E uropean levels and where, forexam ple, Korea will soon produce proportion-ately more PhDs than the UK.struction f irmswill therefore depend on ourabili ty to innovate and to enhance valueorclients . What is important s the performance offirms in those few, central processes by whichthey carry out their business . Examples areproduct conception and design, the constructionprocess, knowledge acquisition and projectmanagement . Theobjective of research andinnovation is then to m ake these processeswork better-to be quicker, to be cheaper andto deliver better quality and alue. This view ofinnov ation shifts the ocus from new tech-

The sustained competit ive successf UK con-

9

For furth erinformation onthe NEC UsersGroup and detailsof how to joincall Steven Crosson 071 987 6999

nology alon e tow ards the effective wo rking of ICE library.

This articleis based onDr Bransbys 1994 UnwinMemorial Lecture thefull text of which savailable fr om the