NEC Framework Contract webinar

Introduction
NEC Framework Contract

Mott MacDonald 17 February 2021
My previous NEC sessions for APM
Professional Services Short Contract (PSSC)
• https://www.apm.org.uk/news/nec-professional-services-short-
contract-pssc-webinar/
NEC Engineering and Construction Short Contract (ECSC)
• https://www.apm.org.uk/event/nec-engineering-and-construction-short-
contract-ecsc/
NEC3 to NEC4
• https://www.apm.org.uk/news/nec3-to-nec4-webinar/
(c) Mott MacDonald NEC Framework Contract

Previous NEC session for APM
NEC Supervisor
• https://www.apm.org.uk/news/nec-engineering-and-construction-
contract-ecc-the-supervisors-roles-and-responsibilities-webinar/
NEC Engineering and Construction Contract (ECC) - compensation
events
• https://www.apm.org.uk/news/nec-engineering-and-construction-
contract-ecc-compensation-events-webinar/

Previous NEC session for APM
NEC - The Risk Register/Early Warning Register and risk allocation
and management
• https://www.apm.org.uk/news/nec-contracts-the-risk-registerearly-
warning-register-and-risk-allocation-and-management-webinar/
NEC - Programme
• https://www.apm.org.uk/news/nec-contracts-programmes-under-ecc-
and-psc-webinar/
ECC Introduction
• https://www.apm.org.uk/news/nec-contracts-an-introduction-why-are-
they-so-different-webinar/

Introduction
Richard Patterson
BA MBA CEng FICE
NEC Contracts Advisory
33 years with Mott MacDonald
26 years with the NEC
Part of NEC teams for NEC4 and X29, climate change

House Keeping
Toilets Phones Fire alarms Drinks

NEC Framework Contract
• Released as part of NEC3 in 2005
• Revised in NEC4 2017
• One of very few standard forms for a
framework
• Mott MacDonald has signed up to several for
our work under NEC Professional Services
Contract (PSC)
• Experience of using it to help Clients engage
other suppliers (often contractors) under the
Framework Contract

NEC Framework Contract – why?
• A ‘framework agreement’ came from the EU
procurement regulations
• Allows a Client to not have to go out to open tender
• The NEC Framework Contract (FC) allows Client to
invite ‘mini-tenders’ from any number of ‘Suppliers’
(each under a similar Framework Contract) to carry
out work on an ‘as instructed’ basis over a set term
• The Client can:
− appoint one or a number of framework Suppliers
and
− invite them to bid for contracts and/or
− simply negotiate and award

Relationships
Relationships
Relationships

Frameworks – public sector
• The Public Contract Regulations 2015 (Regulations (33)) define a
framework agreement as:
• ‘an agreement between
− one or more contracting authorities and
− one or more economic operators,
− the purpose of which is to establish the terms governing
− contracts to be awarded
− during a given period
− in particular with regard to price and, where appropriate, the
quantity envisaged’

Frameworks – public sector
• Guidance:
− https://assets.publishing.service.gov.uk/government/u
ploads/system/uploads/attachment_data/file/560268/
Guidance_on_Frameworks_-_Oct_16.pdf
• The Regulations (33)
− https://www.legislation.gov.uk/uksi/2015/1
02/regulation/33/made

Constructing the Gold
Standard
An Independent Review
of Public Sector
Construction Frameworks
ss
Professor David Mosey
Centre of Construction Law,
King’s College London

The NEC Framework
Contract conditions is
less than two pages!

Some CMAs to start!
Professional Services Short Contract PSSC
Professional Services Contract PSC
Engineering and Construction Short Contract ECSC
Engineering and Construction Contract ECC
Framework Contract FC

11.2 (4) A Time Charge
Order is a contract to
provide advice on a
proposed Work Order on
a time charge basis
11.2(5) A Work Order
is a contract to carry out
work within the
framework scope.
The Framework Contract allows contracts to be awarded as either:
ECC (stated main
options) or ECSC
PSSC
It says ‘time charge basis’ as this is the
intention and allows TCO to be just
‘issued’, but nothing in principle to stop
having any PSSC or PSC contract

NEC Framework Contract – beware?
• No limit on value of Work Orders that
can be instructed under the
Framework Contract
• Each Time Charge Order and Work
Order is a separate contract
• Need to ensure appropriate
organisational governance
procedures
• Perhaps less onerous than for a
‘normal’ ‘new’ contract?

Parties
Client
Supplier 1
Framework
level
framework
contract
Contracts
‘under’ the
Framework
Client
Consultant 1
Time Charge Order
under PSSC
Client
Contactor 1
Work Order under
ECC or ECSC
Same
entity!
Client
Supplier 2
framework
contract

Framework Contract is a coat hanger!
Can include standard
material to be
• referred to from and so
• included in all (‘call off’)
contracts

PSSC
ECC
A
ECC
E
ECSC
ECC
C
PSSC
Time Charge Orders or
Work Orders issued
end date
time
Flexibility - NEC Framework Contract
The CMAs: PSSC = Professional Service Short Contract; ECC = Engineering and
Construction Contract: ECSC = Engineering and Construction Short Contract

Which NEC contract for the Works Orders?
• Could have more than one available under the
Framework – eg ECC and/or ECSC (short contract)
• What is the framework scope of the framework
contract?
• Is it advisory works, research, design, construction,
supply, construction, maintenance or a mix?
• Could this change?
• How much of the likely works are known that might be
tendered in some way via the ‘quotation information’
• Consider the above – and other factors in your choice

Client’s Representative
For each piece of work, select suppliers to be considered
using ‘selection procedure’ (Cl 21.1)
Issue ‘Time Charge Order’ to
‘Supplier’ after consultation (22.1)
Provide additional Contract Data, Scope, Site Information
and pricing document specific to Work Order and instruct
quotation (23.2)
• accept quotation and issue Work Order
• instruct revision
• or notify not to be issued (23.4)
Provide quotation as per 'quotation
procedure’. Assessment (of price) uses
the ‘quotation information’ (23.2)
Supplier
Assess quotation as per ‘quotation procedure’ (23.3).
Replies within period for reply in Contract Data
Could use Time Charge Order to pay
for ‘Early Contractor Involvement’ to
help define a Work Order.
Designs under the Time Charge Order
could be made ‘Scope provided by the
Contractor for its design’ under a
subsequent ECC Work Order

For a Time Charge Order
• 11.2 (4) A Time Charge Order is a contract to
provide advice on a proposed Work Order on a
time charge basis.
• 22.1 If the Supplier is selected for a Time
Charge Order, the Client’s Representative
issues a Time Charge Order to the Supplier.
The Client’s Representative consults with the
Supplier about the contents of a Time Charge
Order before it is issued.
• Full Stop!
• No mention of a quotation process!
• Could include in the selection procedure
• Contract Data suggests PSSC

What does the
Framework
Contract look
like?

Time Charge Order
Framework Contract - structure
Framework Contract
Contract Data part one
Contract Data part two
ECC CD part one entries, Scope and Site Information
that apply to all ECC Work Orders
ECC CD part two entries that apply to all ECC Work
Orders
PSSC Contract Data, Scope which apply to all TCOs
PSSC entries in the Consultant’s Offer and Price List
that apply to all TCOs
PSSC Contract Data,
Scope specific to the
specific TCO
PSSC entries in the
Consultant’s Offer
and Price List that
apply to the specific
TCO
Work
Order
ECSC Client’s Contract Data, and Scope which apply
to all ECSC WOs
ECSC entries Contractor’s Contract Data and which
apply to all ECSC Work Orders
ECSC Contractor’s
Contract Date and Price
List specific to Work Order
ECSC Contractor’s
Contract Data and Scope
specific to Work Order
ECC CD part one entries
specific to Work Odrer
ECC CD part two entries
specific to Work Order,
pricing document

How much detail in eg the ECC Contract Data in the Framework Contract
Data
Start with ECC Contract Data
• Complete entries that will be standard for all packages
• For other entries, state ‘to be advised in the additional
Contract Data specific to a Work Order’ (ref Cl 23.1)
• May need flexibility to add/delete compensation events to
suit specific risk allocation for Work Order – but beware
effect on any tendered ‘prices’ in the quotation information
Scope and Site Information
• May well be a standard part applicable to all Work Orders
(standard specification, standard details?)
• Further detail ‘to be advised in the additional Contract Data
specific to a Work Order’

Framework Contract Data part one includes
• Framework Information
• how the Parties work together (Cl 11.2(2))
• attend meetings as stated in….. (Cl 20.2)
• This is just for the Framework
‘

Framework Information – may include:
• Purpose and objectives
• Details of the framework including its structure and
the number of suppliers appointed.
• Details of how the Parties will work together which
may include:
− the number, purpose and frequency of meetings
the Supplier attends and who attends.
− whether the Supplier identifies a person as its
representative.
− supplier performance review and measurement
requirements.
− communication system to be used.
‘

Framework Information
• Remember there is no payment for Framework
activities!
• If Client wanted to pay then could set up
Framework activities as an initial Time Charge
Order
‘

• framework scope
• defines the type and extent of the work that is
covered by the contract
• specific location?
• sufficiently defined so the Client and Supplier are
satisfied that the Supplier has the resources and
capability required
• might include within the Framework Information
‘

• end date
• last date to issue Time Charge Orders or Work
Orders
• would need a Z clause to allow its extension
− perhaps start with Option X23: ‘Extending the
Service Period’ from the Term Service Contract
(TSC)
‘

• selection procedure
• bespoke process (Cl 21.1) for choosing between
Suppliers with a Framework Contract who could
carry out the piece of work
• Note there is no quotation procedure for Time
Charge Orders
• If required, the selection procedure could include
requirements for quotations for TCOs
• Could possibly include use of standard rates in the
Consultant’s Offer in PSSC in Framework Contract
Data part two as part of selecting a Supplier for a
Time Charge Order
• refer to the general NEC Volume 3: ‘Selecting a
Supplier’ for further guidance

• quotation procedure
• bespoke process for Work Orders setting out:
− how quotations are to be submitted (Cl 23.2)
− how quotations are to be assessed and Supplier
selected (Cl 23.3)
− Include timing requirements
• May give Client options for
− Inviting bids from more than one Suppliers and/or
− direct award to a single Supplier that came out of
the ‘selection procedure’
• ‘quality’?; price?
• refer to the general NEC Volume 3: ‘Selecting a
Supplier’ for further guidance

Time Charge Order
Framework Contract
Framework Contract
Contract Data part one
Contract Data part two
ECC CD part one entries, Scope and Site Information
that apply to all ECC Work Orders
ECC CD part two entries that apply to all ECC WOs
PSSC Contract Data, Scope which apply to all TCOs
PSSC entries in the Consultant’s Offer and Price List
that apply to all TCOs
PSSC Contract Data,
Scope specific to the
specific TCO
PSSC entries in the
Consultant’s Offer
and Price List that
apply to the specific
TCO
Work
Order
ECSC Contract Data, and Scope which apply to all
ECSC WOs
ECSC entries in Contractor's Offer which apply to all
ECSC WOs
ECSC Contractor’s offer
and Price List specific to
Work Order
ECSC Contract Data and
Scope specific to Work
Order
ECC CD part one entries
specific to Work Order
ECC CD part two entries
specific to Work Order,
pricing document
Include forms in quotation procedure

Key other documents pointed to by Framework Contract Data part two
• quotation information
• Basis of assessments for quotations for Work
Orders (23.2)
• Might include the financial information that is
used as part of the determination of who
actually is awarded the Framework Contract
• (note 2008 cases in Northern Ireland
suggesting this has to include eg dummy
prices)

Key other documents pointed to by Framework Contract Data part two
• quotation information
• Likely to point to commercial information in the:
− standard Contract Data part two for ECC and
− standard Contractor's Offer for ECSC
• Anything else that the Client wants the Supplier
to be committed to use in building up prices for
Work Orders
• Any rules for how prices are to be built up and
demonstrated

38
Framework Contract Documents
Contract Data
From Client
conditions of contract
additional conditions of contract
part one
incorporates by ref.
part two
From bidder
Framework Information
Letter
of
Acceptance
or
form of
agreement
38
CD part two / Contractor’s Offer
entries that are the same for all
contracts used for Work Orders
PSSC Client’s Contract Data part
one entries that are the same for
all Time Charge Orders
PSSC Consultant’s Contract Data
entries that are the same for all
Time Charge Orders
CD part one entries that are same
for all NEC contracts to be
available for Work Orders
selection procedure
quotation procedure
quotation information
framework scope

additional conditions of contract
• See NEC’s ‘Preparing and Managing a
Framework Contract’
• Why?
• What?
• How?
• Review
‘
For example
• No mention of whether contracts under the FW
are ‘under hand’ or ‘as a deed’.
• May want a mechanism to extend the end date
• Likely to need a provision for inflation of rates –
but also then include X1 in the call off contracts!

‘
Form of agreement
• See NEC’s ‘Preparing and Managing a
Framework Contract’
‘

Flow Charts and Guidance
• Flow Charts and Guidance (19 pages)
• Both documents are non-contractual and
• provide guidance only

The Framework Contract core clauses
10 Actions
11 Identified and defined terms
13 Communications
14 The Client’s Representative
18 Corrupt Acts
20 The Parties’ obligations
21 Supplier Selection
22 Time Charge Order
23 Quotation (for a Work Order)
30 Completion
90 Termination

Framework tender evaluation
Is going to be interesting!

Framework Tender evaluation
• quality assessment
• financial assessment may include pricing
information in:
− PSSC Consultant’s Contract Data
− Some rates
− ECSC Contractor’s Offer
− Fee percentage, some rates
− ECC CD part two
− fee percentage
− rates for the priced elements of Defined Cost
− quotation information

Simple in
principle
< 2 pages!

26/09/2022 Mott MacDonald | ECC Introduction 47
RT_C
Read the _ contract
10.1 The Parties and the Client’s Representative shall act as stated in this contract.
DWISIT_C
_TalTEO
_ talk (and listen) to
each other
NEC4 has split 10.1 into 10.1 and 10.2 – but no change in effect
Do what it says in the
_ contract
10.2 The Parties and the Client’s Representative
act in a spirit of mutual trust and co-operation.

There are other ways of procuring ‘chunks’ of work-
through a single contract
• The Task Order mechanism in the NEC Term Service
Contract (TSC)
• A section by section approach in the ECC or PSC

How to procure a
series of work
packages using
NEC
https://www.necc
ontract.com/Abou
t-NEC/News-
Media/How-to-
procure-a-series-
of-work-
packages-using-
NEC
Using NEC for
multiple site,
undefined
contracts
On request from
Richard.Patterson
@mottmac.com

NEC Framework Contract webinar

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