Engineering contracts are a quintessential part of construction projects that precisely specify what the client and the contractor have agreed upon in relation to the scope of work, their duties, and the terms and conditions. In recent times, customised contract forms have thrived to improve mutual cooperation, the capacity to be flexible upfront, and the sharing of risks in construction projects.
In this article, we will explore some of the main advantages of NEC training and new engineering contracts previously unknown, such as NEC and NEC3 Option C, as compared with traditional methods.
Improved Collaboration Through Early Contractor Involvement
An important feature of the new forms of contracting, such as the NEC, is that it does not just encourage collaboration between the client, the contractor, and the project team members; it also facilitates it from the very inception of the project. All the phases are repeated under NEC training, from the onset of the design development until the end, just like in the traditional model, where only the design is completed before the appointment of the contractor.
With this, the contractor can provide an invaluable view of constructional aspects, procurement of materials, and what is required regarding the programming of the entire project. The contractor is in a position to point out or recommend a cost-effective and buildable problem in the design stage, which eliminates costly changes during construction. This, in turn, reduces the panic, complaints, and disagreements during the work.
Contracts like NEC now have more options available that help in collaboration, which leads to the creation of more risk-free projects that deliver more.
Flexibility to Accommodate Changes Through Change Control
Often, in a situation where changes are made during the construction of the project, the traditional efficiencies that come with fixed-price contracts are overshadowed due to the fact that the scope is locked and cannot be changed. In addition to the NEC option C types, more modern contracts can offer change handling through the change control mechanism.
In the case of such requirements, the project manager activates the change control process by instructing the workers on how to perform the work. The contractor comes up with a change estimate, and when the project manager is satisfied, the change order gets issued. If approved, a change order is released, designating scope, cost, and programme amendments as the work changes. It thus makes the correction and reflection much more time-efficient and has accurate written records.
Fitting in changes along the whole project timeline, the new contract models, such as NEC3 Option C, are less likely to end up in disputes and claims and can, therefore, save the project from big hurdles. The integrated construction tools create discipline rather than endless changes in function.
Improved Risk Sharing Between Parties
In conventional contracting, the risks are rarely shared and mostly benefit the contractor, especially under the terms of fixed-priced contracts where the contractor has no option but to swallow the unenviable and unforeseen costs. This lateral development is capable of promoting the sharing of risk between client and contractor under the open book method.
Under NEC3 Option C, for PM purposes, the client reimburses the actual defined costs from the contractor and pays a fee, which is a percentage of the benefits, which, as a result, carries the risks. If cost overruns occur with no justifiable occurrence on the contractor’s part, the client bears the expenses over the estimates. On the other hand, the savings are also reflected back to the clients.
New contracts emphasise such two-sided incentive models to encourage the parties to work out problems and increase efficiency when issues arise through fair risk sharing that considers commercial interests.
Enhanced Project Management Procedures
The next set of contract templates has well-laid-out project management procedures and communication rules for the process of project execution.
As shown by NEC3, the commercial construction training agreements now accentuate the meetings where each progress has to be reported, highlight the moment the inspections are made in advance, and specify the format of written communications for future problems. It is important to note that the latter captures the essence of the agreement and does not reflect the procedures that need to be followed. On the contrary, this facilitates effective coordination and transparency between the parties.
Old contract forms were based on experiences rather than time-tested methods. Now, discipline in project management becomes achievable through the use of protocols and new contract forms that promote better information exchange, record keeping, and oversight of construction projects.
Key Takeaways on New Engineering Contract Benefits:
- Before the agreement is signed, more and more contractors from construction training get involved under modified forms of ECC, accompanied by enhanced teamwork than ever in the planning stage.
- Choste control procedures ensure flexibility for any change and solve issues quickly.
- Fresh contracts feature some elements of transactional schemes in which both clients and contractors share the risks accruing from project development.
- The conflict management procedures are designed in shorter ways to facilitate fast dispute resolution.
- Introducing a more advanced project management system will ensure more collaboration and openness.
Conclusion
On the whole, the new engineering contract models are mostly beneficial compared to the conventional ones due to their better interests in convergence, collaboration, flexibility, and risk management. Once owners and contractors get hands-on experience with NEC training, it will only be a matter of time before they are the preferred means of project delivery. Evidently, better value-added outcomes will be offered to all stakeholders in the construction industry.
OTS News on Social Media