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OGC welcomes NEC3 as aid to driving down costs

ICE news

THE OFFICE of Government Commerce (OGC) has officially endorsed the latest edition of the New Engineering Contract (NEC3) as part of its drive to save £2.6bn of public sector money.

The OGC's Achieving Excellence in Construction (AEC) initiative was launched in 1999 with the aim of making savings on public sector projects.

At that time no contract met its aims of collaborative nonadversarial working. This has now changed with the new NEC contract.

The AEC initiative was launched after a review of government's performance as a construction industry client following a spate of 'major failures in time and cost overruns'.

An investigation into this problem carried out by Bath University in 1998 revealed that 73% of government contracts were over budget and 70% were completed late.

The AEC initiative now recommends adopting partnering measures, performance measurement indicators, risk management and whole-life costing tools, developing longterm relationships and reducing fiancial and decision-making approval chains.

Amendments made to the NEC since it was last published in 1998 have seen it fully comply with the initiative, making it the preferred contract to be used on public sector construction projects.

'The OGC wants to promote excellence in public sector construction projects and NEC3 builds on our work in this area. It provides an improved way to get better value for money for the taxpayer and contribute towards the Government's £21.5bn efficiency target, ' said OGC chief executive John Oughton.

A joint statement by the OGC and the ICE which publishes the NEC3 documents said that using the NEC3 could save £2.6bn by improving efficiency in the construction industry.

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