Is NEC3 the finished product for effective procurement ? 26 February 2010 Jon Close – Partner & Head of Construction & Eng...
INTRODUCTION <ul><li>5 Years on……. what’s changed?  </li></ul><ul><li>How have the principles of NEC3 been achieved? </li>...
Flexibility vs. Clarity – contract formation  <ul><li>The elements: </li></ul><ul><ul><li>9 core clauses; </li></ul></ul><...
Partnering – quest for the Holy Grail? <ul><li>“ the parties agree to work together, in a relationship of trust, to achiev...
Partnering – when mutual trust and co-operation disintegrate into dust  <ul><li>Standard of care </li></ul><ul><ul><li>Bir...
Please mind the gap…….z clauses <ul><li>Bridging with industry expectations: </li></ul><ul><ul><li>collateral warranties <...
Effective form of procurement? <ul><li>YES! </li></ul><ul><li>Influencing factors: </li></ul><ul><ul><li>shift in mindset;...
BPE Construction & Engineering Team <ul><li>Jon Close – Partner David Holmes – Solicitor and Chartered Engineer </li></ul>...
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Effective procurement using NEC3

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Legal considerations of NEC3

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Effective procurement using NEC3

  1. 1. Is NEC3 the finished product for effective procurement ? 26 February 2010 Jon Close – Partner & Head of Construction & Engineering
  2. 2. INTRODUCTION <ul><li>5 Years on……. what’s changed? </li></ul><ul><li>How have the principles of NEC3 been achieved? </li></ul><ul><li>Overview of 3 areas of ongoing interest: </li></ul><ul><ul><li>Contract formation; </li></ul></ul><ul><ul><li>Partnering; and </li></ul></ul><ul><ul><li>Coping with industry expectations……or evils! </li></ul></ul>
  3. 3. Flexibility vs. Clarity – contract formation <ul><li>The elements: </li></ul><ul><ul><li>9 core clauses; </li></ul></ul><ul><ul><li>15 secondary options; </li></ul></ul><ul><ul><li>Bespoke terms/ z clauses </li></ul></ul><ul><ul><li>2 cost components. </li></ul></ul><ul><li>Qu 1: Too much choice? </li></ul><ul><li>Qu 2: Does it really matter? The “new” Construction Act implications. </li></ul>
  4. 4. Partnering – quest for the Holy Grail? <ul><li>“ the parties agree to work together, in a relationship of trust, to achieve specific primary objectives, to achieve specific primary objectives”. </li></ul><ul><li>Sir Michael Latham </li></ul><ul><li>(Constructing the Team, 1994) </li></ul><ul><li>Core clause 10.1 – good faith? An effective interpretation? </li></ul><ul><ul><li>Bedfordshire County Council v Fitzpatrick Contractors Ltd [1998] </li></ul></ul><ul><ul><li>Petroemec Inc & Others v Petrobras & Others [2005] CA </li></ul></ul><ul><ul><ul><li>term expressly agreed; and </li></ul></ul></ul><ul><ul><ul><li>Loss calculation established/measurable by reference to conduct of the parties. </li></ul></ul></ul>
  5. 5. Partnering – when mutual trust and co-operation disintegrate into dust <ul><li>Standard of care </li></ul><ul><ul><li>Birse Construction Limited v St David Limited [1999] TCC </li></ul></ul><ul><ul><li>Consistency of approach with X12.2 (6) </li></ul></ul><ul><ul><li>practical point: list activities demonstrating good faith. </li></ul></ul><ul><li>Measurable Partnering </li></ul><ul><ul><li>X20 Key Performance Indicators </li></ul></ul><ul><ul><li>Incentives where “improved upon” – further clarity required. </li></ul></ul>
  6. 6. Please mind the gap…….z clauses <ul><li>Bridging with industry expectations: </li></ul><ul><ul><li>collateral warranties </li></ul></ul><ul><ul><li>copyright </li></ul></ul><ul><ul><li>un/suitable materials </li></ul></ul><ul><ul><li>confidentiality </li></ul></ul><ul><ul><li>3 rd party interests </li></ul></ul><ul><li>Avoiding industry evils – culture and the curse of “the red pen”. </li></ul><ul><li>Appropriate where in line with convention and tenants of established law e.g.. Core clause 17.1: treatment of discovered ambiguities/inconsistencies </li></ul><ul><li>Appropriate amendment - excluding contractor breach. </li></ul>
  7. 7. Effective form of procurement? <ul><li>YES! </li></ul><ul><li>Influencing factors: </li></ul><ul><ul><li>shift in mindset; </li></ul></ul><ul><ul><li>experience; </li></ul></ul><ul><ul><li>administrative resource; and </li></ul></ul><ul><ul><li>knowledge. </li></ul></ul>
  8. 8. BPE Construction & Engineering Team <ul><li>Jon Close – Partner David Holmes – Solicitor and Chartered Engineer </li></ul><ul><li>(01242) 248278 (01242) 248268 </li></ul><ul><li>[email_address] [email_address] </li></ul><ul><li>John Beevor – Consultant and Honorary Consul to Republic of Estonia </li></ul><ul><li>(01242) 248213 </li></ul><ul><li>[email_address] </li></ul><ul><li>Jason Stratford-Lysandrides – Solicitor and former QS </li></ul><ul><li>(01242) 248240 </li></ul><ul><li>[email_address] </li></ul><ul><li>Adam Hiscox – “Soon-to-be-Newly Qualified” </li></ul><ul><li>(01242) 248215 </li></ul><ul><li>[email_address] </li></ul>

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