Maintaining Good Communications in NEC Contracts

John Elven, Senior Consultant at Arbicon, discusses the importance of maintaining good communications in accordance with the requirements of NEC Contracts as a means of promoting dispute avoidance.

NEW ENGINEERING Contract (NEC) disputes often arise where the parties fail to communicate in the manner required by the contract. To avoid disputes, it is important to look at the NEC contract to see what is required when it comes to communications between the parties.

Disputes often arise where a verbal instruction has been given to a site operative by the Project Manager or Supervisor, but has not been subsequently put into writing. This can lead to situations where the instructed works have been carried out by the Contractor but not paid for, with the project management team asserting that the works were never instructed.

Maintaining Good Communications

NEC contracts are prescriptive when it comes to matters such as the giving of notices, making applications for payment (as NEC 4) and the procedures required in respect to compensation events.

NEC 4 clause 13 details the NEC general requirements in respect to communications.

Clause 13.1

“Each communication which the NEC contract requires is communicated in a form which can be read, copied and recorded. Writing is the language of the contract.”

Every communication should be in writing. These communications could include documents sent by post, email, and any other electronic means.

Clause 13.2

In keeping with the trend towards digital contract management, NEC 4 continues in clause 13.2:

“If the Scope specifies the use of a communication system, a communication has effect when it is communicated through the communication system specified in the Scope.

“If the Scope does not specify a communication system, a communication has effect when it is received at the last address notified by the recipient for receiving communications or, if none is notified, at the address of the recipient stated in the Contract data.”

Those working under NEC 4 projects should familiarise themselves with any communications requirements that may be specified in the Scope (‘Scope’ is akin to NEC 3’s ‘Works Information’) – such as the use of 4P.

If use of a system such as 4P has been specified, those using NEC 4 must pay particular attention to the fact that “a communication has effect when it is communicated through the communication system specified in the Scope.” In other words, if you do not use the communication system as specified in the Scope, your communications could become meaningless.

Clause 13.3

Another problem frequently encountered with communications is the timing. To ensure that all matters are dealt with promptly under NEC 4, clause 13.3 requires that:

“If the contract requires the Project Manager, the Supervisor or the Contractor to reply to a communication, unless otherwise stated in these conditions of contract, they reply within the period for reply.”

The Project Manager, the Supervisor, and the Contractor are all required by the contract to respond to a communication.

NEC 4 imposes constraints to ensure that all matters are dealt with in a timely manner. However, where the ‘conditions of contract’ do not impose a specific timeframe, clause 13.3 still requires that other communications be responded to ‘within the period for reply.’ This period will be defined in the Contract Data Part 1 and is typically a period of 2-weeks.

The prompt responses to communications, as required by NEC contracts, ensures that matters are dealt with in a timely manner which then results in a more efficiently run project. Disputes can be easily avoided as long as all parties act ‘as stated in the contract’ and issue all their communications in writing, and on time.

Read Part 2 of Maintaining Good Communications in NEC Contracts here.

Fill out the contact form for advice on an NEC Contract, or call Arbicon’s offices: 01733 233737 Peterborough, 0207 406 1494 London or 0121 262 4086 Birmingham.

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