Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

ICE calls on government to reduce use of NEC Z clauses

Ice hq 2by3

The Institution of Civil Engineers (ICE) has called on the government to reduce the use of modified contracts within the construction industry.

The institution has called on the government to insist on universal, unamended NEC contracts throughout the supply chain. This includes minimising the use of Z clauses and avoiding unnecessary amendments which “upset the balance” of risk and reward.

Z clauses are currently inserted into NEC contracts to enable parties to agree additional conditions of contracts. However, many parties - including the NEC itself - have complained that the clauses can be abused or used incorrectly, changing the risk profile of a contract, often making them ambiguous with cost and time implications.

In its list of proposals submitted to the government, the ICE’s report said: “The NEC has played a big part here, and it is inherently flexible to allow clients to tailor works information etc. to their own needs. However, clients continue to make variations to the core and supplementary conditions of contract and more should be done to discourage this.”

The document, which has been submitted for the Government Construction Strategy (GCS) 2016-2020, makes 12 recommendations over the five key areas of commercial strategy, procurement, contracts, digital transformation and risk management.

The recommendations also include adopting the principles set out in Project 13 to promote better engagement with the supply chain and the introduction of a standardised, more collaborative approach to risk measurement and mitigation. The ICE also sets out how it wants the government to progress to BIM levels three and four to enhance digital transformation.

ICE head of policy and public affairs Hannah Vickers said the ICE recognised the importance of the GCS and the role it could play in helping to build a sustainable future for construction. and approached the IPA to enter a submission to the 2018 update.

“In creating this submission, we have bought together key industry experts to highlight best practice. The door is open for the Government to collaborate with the industry to help shape the development of the GCS and together build a sustainable and productive future for construction within the UK.

“We hope to see the Government use its substantial influence effectively and consistently to help build an environment that fosters better working practices, and deliver a step-change in its relationship with industry.”

The document will be submitted via the Infrastructure and Projects Authority (IPA) for consideration by the Government Construction Board (GCB).

Like what you’ve read? To receive New Civil Engineer’s daily and weekly newsletters click here.

Readers' comments (2)

  • The push to maintain a good balance of risks in projects cannot only be addressed through standardisation and collaboration. Application of NEC Z clauses is similar in principle to the Particular Conditions used in FIDIC contracts. In both contractual models, it has long been recognised that while the common risks can be remedied in the general clauses, projects' uniqueness needs to be allowed for though potential additional clauses. The issue of abuse of these additional clauses to alter a balanced approach to risk which would be fair and reasonable requires behavioural change. This reflects the basic tenant of a contract, to engender a relationship of trust through mutual agreement.
    Part of this trust is of course reflected in the financial instruments required to cover trust: bonds, retention, insurance, guarantees - all adding 'value' to the contract in different ways to provide risk cover mostly to the project and ultimately the Client. With the development of blockchain and modern financial tools, perhaps the basic strategic content of contracts needs an overall remodelling to allow for new ways to engender a relationship of trust through mutual agreement? Standardisation and collaboration will be a part of this.

    Unsuitable or offensive? Report this comment

  • Overheard at a meeting, 'is it me, or has the NEC morphed into the ICE 5th Edition?'

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.

Related Jobs